South Africa's rand erased earlier losses against the dollar on Friday, gaining more than one percent after the release of US jobs data eased fears of a recession in the world's biggest economy. In the absence of key domestic developments, the rand took its cue from international markets, which rose after data showed US jobs growth was higher than expected in July.
The rand was trading at 6.862 to the dollar at 1354 GMT, 1.2 percent stronger than Thursday's New York close of 6.948, recovering from a two-week low of 6.96 touched earlier. It hit a session high of 6.8455. "We are seeing a bit of relief for the rand following better than expected non-farm payrolls data, but this is unlikely to last for long," said Anisha Arora, emerging markets analyst at 4CAST.
The rand has been volatile this week as worries over a deepening eurozone debt crisis and the global economy offset the impact of increased investor inflows into the local bond market, which have kept the currency on the firmer side of 7.00. Two attempts to convincingly break support at 6.91 - a 200-day moving average - have failed this week and a close below 6.90 this week will re-affirm the currency's resilience, bringing the mid-6.80's into play. The yield on the 2015 bond was up two basis points to 7.15 percent and that on the 2026 issue climbed 11.5 basis points to 8.245 percent.