Johannesburg - The
rand could struggle to regain its strength in the days ahead as the country's
weak fundamentals offset an anticipated end-of-year boost to the currency.
The rand was at R8.900 to the dollar at 06:48 GMT on Monday,
barely changed from Friday's New York close.
The currency looked set to trade in a range of between R8.75
and R8.95 this week but there was potential for further weakness if the
R8.95/8.96 level is breached, one trader said.
"We are looking for more short-term weakness," he
said.
"The fundamental backdrop is still pretty weak and
that's reflected in the numbers we saw last week."
After hitting a two-week high last Thursday, the rand was
dragged lower the following day when data showed South Africa's trade deficit
had widened more than expected in October.
The rand often strengthens towards year-end due to exporter
demand for the currency but the poor backdrop and risks associated with the
ANCs' elective conference this month are likely to dampen sentiment, the trader
added.
Government bonds were weaker with the yield on the 2026
paper up 6 basis points at 7.62% and that on the 2015 bond 6.5 basis points
higher at 5.53%.