Despite very little movement from its overnight levels, a firm South African rand was range bound in the morning session on Friday awaiting US non-farm payroll data out later.

At 9.00am the rand was bid at 7.5725 to the dollar from 7.5778 at its previous close. It was bid at 11.2800 to the euro from its previous close of 11.2683 and was at 12.5809 against sterling from 12.5575.

The euro was bid at $1.4870 from $1.4871 overnight.

"We didn't see too much trade movement overnight from the rand. We are awaiting non-farm payrolls in the US later, and until then 7.56 to 7.62 against the dollar is the range. To break 7.56 we are going to have to see serious numbers," a local currency trader said.

RMB analysts John Cairns and Nema Ramkhelawan said: "We estimate the SARB bought around US$470 million from the market in October – a meaningful amount, and the largest purchase since the middle of last year. 7.30 on US dollar/rand is clearly now the level where we should expect further such action."

RMB said that net reserves rose $870-million to $38.8-billion in October.

"Approximately $400-million of this comes from valuation effects associated with interest gains, the gold price increase and the increase of the US dollar value of euro holdings. This implies that around $470-million was purchased from the market. While these estimates are subject to some error, this is a large enough figure to suggest that they were almost certainly in the market in a meaningful way," the analysts said.

"If our assessment is correct it probably implies that they were in the market around the middle of the month when US dollar/rand traded briefly under 7.30. Their focus is more on the trade-weighted rand, but still this US dollar/rand level can act as a good proxy point. In other words, if and when we trade down to these levels again we should expect further reserve accumulation from the Bank," Cairns and Ramkhelawan said.

They said that now that both the Sarb and Treasury had shown their hand, "we can expect further action if we trade back to these levels. This doesn't imply we can't see further rand gains – it's just that it becomes a little bit more difficult.

"This is even more so the cases since other central banks are also taking action to restrict their own currency gains," Cairns and Ramkhelawan concluded.

Dow Jones Newswires reported that the dollar edged down against the yen in Asia on Friday as some short-term players sold the US currency on the view that a keenly-awaited US jobs report later in the day may show the country's employment conditions worsening.

The US non-farm payrolls report, due at 13:30 GMT, could show 175 000 jobs cut in October, economists surveyed by Dow Jones Newswires said. While that would be an improvement on the 263 000 jobs lost in September, the unemployment rate is tipped to rise from 9.8 percent to 9.9 percent, menacingly close to the psychologically key 10.0 percent level.

If the unemployment rate comes in worse than expected, hitting or topping the 10.0 percent mark, the dollar would likely fall against its rivals, dealers said.

The possibility of better-than-expected figures lifting the dollar, however, could not be ruled out, dealers said. A separate employment report released on Wednesday by payroll giant Automatic Data Processing, Inc showed the pace of private sector job losses easing to 203 000 in October, while a revised estimate showed 227 000 jobs lost in September, less severe than the 254 000 initially reported.

"Given the uncertainty, we can't rule out the case of a positive surprise, in which case I think dollar-yen would go up to around Y92.00," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Securities.

Bonds gain weight

Bonds were a little stronger in early trade on Friday thanks to a solid rand. However, Eskom and deficit concerns are weighing on sentiment.

By 8.44am, the short-term government R154 bond was bid at 7.060 percent from a previous close of 7.040 percent. The medium-term R157 was at 8.310 percent from 8.350 percent, while the long-term R186 was bid at 8.925 percent from 8.955 percent.

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