South Africa's rand firmed against the dollar in early trade on Monday, on track for a fifth consecutive daily gain after weak U.S. payrolls data signalled that a near-term Fed hike was unlikely.
Rand firmer after weak U.S. payrolls, stocks up
Concerns over emerging markets have spiralled, with falling commodity prices, a local strike in the coal sector, surging outflows and slow growth in China have all created talks of "an emerging market crisis".
Government bonds opened stronger with the benchmark 2026 issue shedding 10 basis point to 8.235 percent.
Stocks opened firmer with the benchmark JSE Top-40 index adding 1.2 percent to 46,206 points.
By 0649 GMT the rand was trading at 13.6850 per dollar, up 0.34 percent from Friday's New York close.
"It appears that the world's investment community seems to be latching onto the "lower rates for longer theme", said Warrick Butler a chief currency trader at Standard.
Traders however said the rand remained vulnerable as swinging sentiment and post payrolls volatility still implied elevated risks.
"Risk assets have had a harder time as they weigh up the lower Fed rate outlook with yet further uncertainty. The rand exemplifies this theme nicely, having initially weakened after the figure before gaining mildly," said John Cairns a currency strategist at Rand Merchant Bank.
On the local front, National Union of Mineworkers went on strike in the coal sector on Sunday after wage talks collapsed last week. The lion's share of the country's electricity is generated from coal, a commodity also exported to Europe and Asia.
Central banks are the focus this week with the U.S. Fed minutes coming out on Thursday, which will shed light on how concerned it is about market volatility and the potential spillover from global growth.
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