South African rand gains, focus on Middle East tension and US payrolls data
JOHANNESBURG, Oct 4 (Reuters) -The South African rand recuperated some losses in early trade on Friday, ahead of a key U.S. payrolls data and after slumping on Thursday as tensions escalated in the Middle East.
By 0730 GMT, the rand ZAR=D3 traded about 0.5% firmer at 17.4275against the dollar. Since the start of the week, however, the local unit was down nearly 2%.
"The ZAR had a tough week, largely driven by a USD resurgence fuelled by better-than-expected U.S. labour data and rising geopolitical risks," said Andre Cilliers, currency strategist at TreasuryONE.
The dollar =USD hovered near a six-week high ahead of a payrolls report that could give hints on the path of interest rate cuts in the world's biggest economy.
The greenback was also supported by demand for safe-haven assets after an Iranian missile attack on Israel on Tuesday left investors assessing widening Middle East tensions and their impact on the global economy.
Like other risk-sensitive currencies, the rand often takes direction from global drivers in the absence of major local factors.
The local unit has gained more than 4.5%against the greenback over the last three months.
"The ZAR's correction was overdue after a period of significant appreciation, and the nonfarm payroll data today will play a key role in determining its next move," Cilliers added.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index .JTOPI was about 0.6%up in early trade.
South Africa's benchmark 2030 government bond ZAR2030= was slightly softer in early deals, with the yield up 3.5basis points to 9.19%.
Reporting by Tannur Anders; Editing by Varun H K
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