JOHANNESBURG (Reuters) – The South African rand edged higher against the dollar despite a strong U.S. jobs report on Friday, after a difficult week for risk sensitive currencies as tensions escalated in the Middle East.
By 1512 GMT, the rand traded about 0.3% firmer at 17.465 against the dollar. Since the start of the week, the local unit is down about 2%.
The dollar jumped to a seven-week high after data showed that U.S. employers added more jobs than expected in September, leading traders to pare bets of an outsized interest rate cut by the Federal Reserve in November.
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 the impact on the global economy.
Investors prefer a stable investment like the dollar during periods of crisis as opposed to risk-sensitive currencies such as the rand.
Despite the setback this week, the local unit has gained more than 4% against the greenback over the last three months, thanks to a boost in investor sentiment based on improved electricity supply and the formation of a coalition government.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed 0.15% lower.
South Africa’s benchmark 2030 government bond was softer, with the yield up 5 basis points to 9.205%.
(Reporting by Tannur Anders and Bhargav Acharya; Editing by Varun H K and Alison Williams)
