Johannesburg - The rand was slightly weaker against the
dollar on Tuesday as the market remained tentative ahead of a slew of local
data this week, including the medium-term budget statement.
The rand was at R8.6765 to the dollar at 06:43 GMT, 0.5%
below Monday’s New York close.
Two months of labour unrest and
credit downgrades by Moody’s and Standard and Poor’s have weighed on the rand,
which slumped to a three-and-a-half year low of R8.995 on October 8.
The currency has since rebounded and analysts say inflows
into government bonds and a healthy stock market have supported the recovery.
The benchmark JSE Top 40 - (Tradeable) [JSE:J200] index
topped the 33,000 mark for the first time in its 17-year history last week.
Analysts said the market is likely to remain subdued ahead
of the release on Wednesday of September inflation figures and the medium-term
budget statement on Thursday.
“Our asset classes are not being actively traded,” said
Brigid Taylor, head of institutional sales at Nedbank, adding that the market
was “waiting for better clarity with regards to where the economy is actually
going.”
Government bonds were barely changed, with the 3-year and
14-year instruments trading at 5.4% and 7.6% respectively.
Analysts at Absa Capital said they expected the rand to
trade in the R8.50 - R9.00 range for the rest of the year due to domestic challenges.
“Even though there are signs that the worst of the local strike activity may be behind us, South Africa’s fundamental backdrop remains relatively precarious given the widening current account deficit, the sizeable fiscal deficit situation and the deteriorating output gap,” the bank said in a note.