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South African Rand Steady on Drop on U.S. Rate Expectations

JOHANNESBURG, July 7 (Reuters) - The South African rand hovered around its previous close against the dollar in early Friday trade after falling almost 2% the previous day amid risk-averse markets.

The rand traded at 19.0925 against the dollar at 0609 GMT, not far from its previous close of 19.1100.

The dollar index was at 103.010, down 0.08% against a basket of global currencies.

The rand slumped on Thursday as the Federal Reserve's June meeting minutes revealed a hawkish policy stance, prompting investors to move away from riskier assets.

Analysts said U.S. jobs data pointed to further interest rate hikes, with private payrolls showing almost 500,000 jobs created in June, well above the 267,000 in May.

"The unexpected jump in payrolls has dampened market sentiment as a 'hot' jobs market (and) may provide further motivation for the US Federal Reserve to continue its rate hike path," First National Bank analysts said in a research note.

Earlier on Friday South African Reserve Bank data showed net foreign reserves fell to $54.936 billion at the end of June, from $55.045 billion in May.

The central bank will also hold its weekly treasury bill and inflation-linked bond auctions around 0930 GMT.

South Africa's benchmark 2030 government bond was slightly stronger in early deals, with the yield down 2.5 basis points at 10.670%.

Reporting by Tannur Anders Editing by Bhargav Acharya and David Goodman

Source: Reuters

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