Rand little changed though possible Japanese stimulus buoys risk-on trade

[caption id="attachment_144170" align="alignright" width="300"] Image: Gallo Images / Foto24 / Brendan Croft[/caption]

The rand was marginally softer against the dollar at midday on Monday‚ although still in firmer territory after solid US nonfarm payroll jobs numbers on Friday triggered global risk-on trade.

The rand gathered steam against the greenback on Friday despite stronger-than-expected US jobs data‚ as investors did not expect the US Federal Reserve to raise interest rates anytime soon‚ despite the solid jobs number.

The US economy added more than 120‚000 more jobs in June than economists and investors expected.

Payrolls increased by 287‚000 jobs in June‚ the US labor department reported‚ more than the 165‚000 that was expected by economists and market participants‚ while May job numbers were revised down to 11‚000 new jobs‚ from 38‚000.

These numbers showed that the US economy was not slowing down‚ but was not strong enough to warrant an interest-rate increase anytime soon.

At 11.36am‚ the rand was at R14.5995 to the dollar from R14.5652 at the previous close.

It was at R16.1032 against the euro from R16.0894 previously‚ and at R18.8139 against the pound from R18.8598 previously.

The euro was at $1.1031‚ from $1.1050 at the previous close.

TreasuryOne’s chief currency dealer Wichard Cilliers said the global economy looked to be "a rosier place" on Monday morning than it did on Friday morning as the US Job’s number for June was remarkably better than expected‚ which has managed to relieve recent qualms the markets have expressed.

"Add to this that prospects are improving that the Bank of Japan will launch additional stimulus of $120bn‚ and you can see why risk assets are trading firmer‚" he said. - TMG Digital/BDlive