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Rand, bonds ease after China data

Feb 03 2012 09:09 Reuters

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Johannesburg - The rand eased slightly against the dollar in early Friday trade as investors' appetite for riskier emerging market assets waned after disappointing economic data out of Asia.

Government bonds also showed weakened ahead of the sale of domestic government paper later in the session.

The rand was trading at R7.6550 by 06:37 GMT, a shade weaker than a R7.64 close in New York. The currency hit a five-month high of R7.605 during on Thursday.

China reported disappointing services data early on Friday, putting a slight dent in risk appetite.

However, the rand and other emerging market assets may bounce back if US jobs data paint a positive picture for the world's biggest economy and Greek government talks with private creditors make headway.

“Even though the rand has recovered aggressively over a relatively short space of time, if global risk appetite accelerates further, then rand bulls could realistically look for a move down to R7.50, if not R7.32, in the near term,” Absa Capital said.

Yields on government debt were up 2 basis points to 6.415% on the 2015 bond and 8.085% on the 2026 issue.

Government is looking to sell R800m of inflation-linked bonds, which saw decent demand last week. Results are due at 09:00 GMT.

The 3-month Treasury Bills, whose auction results will be out at 10:00 GMT, were undersubscribed last week and will be a signal of whether demand has returned or if the Treasury is going to be offering smaller amounts of short-term debt.

 

 
 
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