Rand edges up but Turkey insecurity poses risk

Johannesburg - The rand was on firmer ground against the dollar in early on Monday trade, but analysts warned that a bomb attack in Turkey could sap emerging market risk appetite.

Government bonds eased slightly while the Top 40 futures index on the JSE exchange dipped 0.12%, pointing to a flat start for the bourse at 09:00.

At 08:48 the rand traded up 0.41% at R13.3050/$ compared with where it ended Friday's session in New York.

The rand has clawed back significant ground over the last two weeks since hitting a record low of 14.1600 on September 29.

The local currency's recovery has largely been aided by investors moving back into high-yielding emerging markets as a US interest rate hike in 2015 looks increasingly unlikely.

"A weekly close below $13.1700/R could see a deeper correction to 12.95 and even 12.70," Standard Bank trader Warrick Butler said.

But a suicide bombing in Turkey, which put pressure on the rand's emerging market peer the lira on Monday, could be the rand's undoing.

"Already this morning the lira has suffered from risk aversion losing well over 1% against the dollar from Friday’s close. This could plague the rand," Butler said.

Yields inched up across the curve, with the 2026 secondary market benchmark note maturing in 2026 adding 1 basis point to 8.19%.