The rand was slightly weaker against the dollar on Friday, but - TopicsExpress



          

The rand was slightly weaker against the dollar on Friday, but showed signs of steadying after a volatile week in which it hit a new five-year low. The rand was at R11.2600/$ at 14:49 GMT, down 0.5% from Thursdays New York close, though it firmed slightly earlier in the session after data showed South Africa recorded a wider R2.78bn trade surplus in December from R770m the previous month. It seems to be settling in ranges for now but still very much emerging market headline driven, said Rand Merchant Bank FX trader Jim Bryson. In a volatile week which saw investors shun emerging market assets, the US Federal Reserve reduce its monthly bond purchases by a further $10bn and the South African Reserve Bank announce a surprise interest rate cut, the rand swung between a high of R10.9050/$ and a five-year low of R11.3900/$. Ongoing strikes in the platinum mining sector have also kept the rand under pressure, with the Association of Mineworkers and Construction Union this week rejecting a 9% wage offer from leading producers.Despite the central bank increasing its repo rate by 50 basis points to 5.50% on Wednesday, the rand continued to weaken as the market viewed the move as inadequate .More uncertainty could be in store for the rand next week, given the nervousness about emerging markets, Bryson said.The danger is that we re-test 11.38, he said. Government bonds remained on a weaker footing, with the yield on the 2026 government bond rising 11 basis points to 7.405% while that on the 2015 paper was 8.5 basis points higher at 8.93%.
Posted on: Sat, 01 Feb 2014 12:53:13 +0000

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