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Johannesburg - The rand was slightly firmer against the dollar on Wednesday but economic data from the United States in the coming days could push it weaker if the numbers come through stronger than expected.
The rand was at R9.8520/$ at 08:37, up 0.2% from its New York close on Tuesday.
It has traded in a narrow range so far this week amid low liquidity due to a public holiday on Tuesday.
The market will be keeping a close eye on US economic data due to be released this week, with any signs of a strengthening economy likely to raise expectations that the Federal Reserve will begin scaling back its bond-buying programme.
Data due on Wednesday include new home sales and durable goods orders.
South Africa's weak economic fundamentals, including widening current account and budget deficits, make it vulnerable to a reduction in the Fed's stimulus.
"We believe that the rand remains vulnerable over the coming months, mainly because Fed tapering has merely been delayed and South Africa's fundamental landscape is likely to have deteriorated further by the time Fed actually starts tapering," Absa Capital analysts wrote in a note.
Government bonds were firmer, with the yield on the 2026 paper declining 5 basis points to 7.855% and that on the 2015 instrument falling 1 basis point to 5.91%.
South Africa will auction R2.35bn of 2023, 2031 and 2037 bonds at 11:00.
The rand was at R9.8520/$ at 08:37, up 0.2% from its New York close on Tuesday.
It has traded in a narrow range so far this week amid low liquidity due to a public holiday on Tuesday.
The market will be keeping a close eye on US economic data due to be released this week, with any signs of a strengthening economy likely to raise expectations that the Federal Reserve will begin scaling back its bond-buying programme.
Data due on Wednesday include new home sales and durable goods orders.
South Africa's weak economic fundamentals, including widening current account and budget deficits, make it vulnerable to a reduction in the Fed's stimulus.
"We believe that the rand remains vulnerable over the coming months, mainly because Fed tapering has merely been delayed and South Africa's fundamental landscape is likely to have deteriorated further by the time Fed actually starts tapering," Absa Capital analysts wrote in a note.
Government bonds were firmer, with the yield on the 2026 paper declining 5 basis points to 7.855% and that on the 2015 instrument falling 1 basis point to 5.91%.
South Africa will auction R2.35bn of 2023, 2031 and 2037 bonds at 11:00.
