Fin24

China drags rand weaker

2012-04-13 09:02

Johannesburg - The rand retreated against the dollar, dragged by worse-than-expected Chinese economic data which has seen commodity currencies fall in early Friday trade.

The rand is susceptible to Chinese economic developments as about 30% of South Africa's exports are to Asia.

The data showed China's first-quarter growth was at its slowest in nearly three years and below economists’ expectations.

The rand was down just over half a percent at a session low of R7.9099 at 06:28 GMT, compared to a R7.8650 close in New York on Thursday, when the rand had gained 1.8%.

Analysts say Thursday’s gains may not all be eroded and the rand could, in the very short term, firm up to the R7.80 area.

“Yesterday the rand came back against all the majors, it’s improved a bit and showing some stability. (The) pick-up in the rand points to some near-term stability,” said Judy Padayachee, a technical strategist at Absa.

Padayachee said she expected further rand recovery towards the R7.75-R7.80 area into next week, and then the rand may turn again by month end.

Government bonds were steady at 6.70% on the 2015 note and 8.455% on the 2026 issue, still holding onto Thursday’s rand-supported gains.

Treasury is looking to sell R800m in inflation-linked paper between the 2028, 2017 and 2022, results are due after auction closes at 09:00 GMT.