South African rand slips against dollar after stronger US jobs data

JOHANNESBURG (Reuters) -The South African rand slipped against the dollar on Friday after stronger-than-expected U.S. jobs data signalled that the Federal Reserve could continue with its rate hike cycle.

At 1512 GMT, the rand traded at 18.4200 against the dollar, down around 0.7% from its closing level on Thursday.

Non-farm payrolls in the United States grew by 253,000 in April, above the 180,000 predicted by economists, pointing to sustained labour market strength that could compel the Fed to keep interest rates higher for longer to tame inflation.

The dollar index jumped on the report before paring gains to trade near its previous close of 101.34.

The risk-sensitive rand often takes cues from global drivers such as U.S. economic data in the absence of local catalysts.

Shares on the Johannesburg Stock Exchange recovered from their previous day’s tumble, ending the week higher.

The blue-chip Top-40 index closed up 1.13%, while the broader all-share index was 1.12% higher.

“Equity markets look to have been given a late week reprieve after U.S. employment data saw the U.S. leading the rest of the world higher in afternoon trade,” said Shaun Murison, senior market analyst at IG.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 4 basis points at 10.130%.

(Reporting by Tannur Anders and Alexander Winning; Editing by Kirsten Donovan)