Johannesburg - The rand firmed against the dollar on
Wednesday, taking heart from reports that France and Germany would support an
increase in the eurozone bail-out fund for countries struggling with debt.
However, rand movements remain highly volatile as investors
waver between taking on and dumping risky assets, reacting to any developments
that seem to give direction about how the eurozone debt crisis will be
resolved.
The rand was trading at R7.95 against the dollar at 06:45
GMT, 0.58% firmer than Tuesday’s New York close of R7.9960. It had bounced from
a two-week low of R8.0960 hit Tuesday.
"The rand recovered after comments that France and Germany would support an increase to the EFSF (European Financial Stabilisation Facility) to €2 trillion and recapitalise banks," said Brigid Taylor, head of institutional sales at Nedbank.
After a lull on the domestic data front, inflation and
retail sales will be out at 08:00 GMT and 11:00 GMT respectively, providing
local flavour in a market that has mainly been driven by global events.
Annual inflation is expected to rise to 5.6% in September
from 5.3% in August.
In a speech in Cape Town on Tuesday, Reserve Bank Deputy Governor Daniel Mminele said that although food and fuel prices were clouding the inflation picture, there was no evidence to suggest pressures were becoming entrenched.
Government bonds started on a firmer note on Wednesday after
those dovish comments, with the yield on the 2015 bond down five basis points
to 6.75% and that on the 2026 falling 4.5 basis points to 8.465%.
Domestic stocks looked set to start on a positive note, with the JSE's Top 40 - (Tradeable) [JSE:J200] December futures contract up 0.47% before the start of trade at 07:00 GMT.