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Johannesburg - The rand ended weaker against the dollar in local trade on Monday as importers sold the currency for dollars after it hit a fresh one-month high of R6.6750/$ early in the session.
Trade and Industry Minister Rob Davies had said earlier the rand was overvalued and that the government was discussing ways to make the currency more desirable.
The unit has gained about 14% against the dollar in the last 12 months, raising concerns among manufacturers and trade unions.
Its strength has helped cushion the effects of rising prices, however, and finance minister Pravin Gordhan has said South Africa is fortunate and that the government will not intervene to weaken the rand.
Dealers said local news will struggle to move the market this week as investors concentrate on the global picture, where prospects for another Greek bailout and the outlook for the US economy are primarily driving sentiment.
In early evening trade, the rand was 0.4% weaker at R6.7450/$, off Friday’s New York close of R6.7180/$.
“We had very good buying interest all day in dollar/rand. I think below 6.70 it starts to run into natural buying interest,” said Jim Bryson, trader at RMB’s forex dealing desk.
“We saw the high for the rand at 6.6750 first thing this morning, but there’s support there - we needed to break 6.67 to go down to 6.60. The rand weakened really on good importer demand from 6.67 the whole day,” he said.
Bryson added that the currency pair was now in a 6.67-6.77 range, waiting to react to moves on the euro, which the local currency tends to follow.
On the bourse, stocks ended little changed, holding above key technical levels, as investors juggled the sustained strength in the rand, weaker global equities and higher commodity prices.
Government bonds were little changed from previous closes on the JSE, with the yield on the 2015 bond half a basis point lower at 7.415% and the 2026 yield adding half a basis point to 8.395%.
The market will have increased supply of the 2026 bonds after a weekly government auction on Tuesday morning, where R1.4bn of that paper is up for sale.
Trade and Industry Minister Rob Davies had said earlier the rand was overvalued and that the government was discussing ways to make the currency more desirable.
The unit has gained about 14% against the dollar in the last 12 months, raising concerns among manufacturers and trade unions.
Its strength has helped cushion the effects of rising prices, however, and finance minister Pravin Gordhan has said South Africa is fortunate and that the government will not intervene to weaken the rand.
Dealers said local news will struggle to move the market this week as investors concentrate on the global picture, where prospects for another Greek bailout and the outlook for the US economy are primarily driving sentiment.
In early evening trade, the rand was 0.4% weaker at R6.7450/$, off Friday’s New York close of R6.7180/$.
“We had very good buying interest all day in dollar/rand. I think below 6.70 it starts to run into natural buying interest,” said Jim Bryson, trader at RMB’s forex dealing desk.
“We saw the high for the rand at 6.6750 first thing this morning, but there’s support there - we needed to break 6.67 to go down to 6.60. The rand weakened really on good importer demand from 6.67 the whole day,” he said.
Bryson added that the currency pair was now in a 6.67-6.77 range, waiting to react to moves on the euro, which the local currency tends to follow.
On the bourse, stocks ended little changed, holding above key technical levels, as investors juggled the sustained strength in the rand, weaker global equities and higher commodity prices.
Government bonds were little changed from previous closes on the JSE, with the yield on the 2015 bond half a basis point lower at 7.415% and the 2026 yield adding half a basis point to 8.395%.
The market will have increased supply of the 2026 bonds after a weekly government auction on Tuesday morning, where R1.4bn of that paper is up for sale.
