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Johannesburg - The rand steadied against the dollar early on Tuesday, keeping a firmer bias on a greenback pressured by soft economic data that suggested the US Federal Reserve may delay its withdrawal of stimulus.
The rand was at R9.7960/$ at 06:38 GMT, on the firmer side of its R9.8010/$ close in New York on Monday.
The currency is trading within Monday's range and looks set for a third day of gains against the dollar.
Soft home sales data hit the dollar on Monday by shifting expectations of the timing of the US Federal Reserve's pull-back from its bond-buying programme, which has seen increased inflows into emerging markets such as South Africa.
A reversal of the flows puts the rand under pressure as it raises concerns about how easily South Africa's gaping current account gap will be funded.
At news conference after last week's interest rate decision, the South African Reserve Bank (Sarb) conceded that the account was not as easily funded as previously.
"(Dollar/rand) remains weak but the R9.7730/$ low of last week has held so far. A subsequent break here should set up a run to R9.66/$ over the next few days," said Neil Irving, a technical analyst for 4Cast.
The rand managed gains to R9.7840 on Monday but needs fresh impetus to firm further.
The yield on the 2026 government benchmark bond was up 3 basis points to 7.905% before a weekly auction.
Dealers will be watching the result of a sale of 2023, 2031 and 2037 paper after the auction closes at 09:00 GMT.
The Sarb releases its leading economic indicator for May at 07:00 GMT. The sentiment indicator ticked up 0.2% in April and economists expect slightly more improvement in May.
At 08:00 GMT the Bank will release an annual report on economic growth although coming so soon after an interest rate decision it is not expected to contain much new information.
The rand was at R9.7960/$ at 06:38 GMT, on the firmer side of its R9.8010/$ close in New York on Monday.
The currency is trading within Monday's range and looks set for a third day of gains against the dollar.
Soft home sales data hit the dollar on Monday by shifting expectations of the timing of the US Federal Reserve's pull-back from its bond-buying programme, which has seen increased inflows into emerging markets such as South Africa.
A reversal of the flows puts the rand under pressure as it raises concerns about how easily South Africa's gaping current account gap will be funded.
At news conference after last week's interest rate decision, the South African Reserve Bank (Sarb) conceded that the account was not as easily funded as previously.
"(Dollar/rand) remains weak but the R9.7730/$ low of last week has held so far. A subsequent break here should set up a run to R9.66/$ over the next few days," said Neil Irving, a technical analyst for 4Cast.
The rand managed gains to R9.7840 on Monday but needs fresh impetus to firm further.
The yield on the 2026 government benchmark bond was up 3 basis points to 7.905% before a weekly auction.
Dealers will be watching the result of a sale of 2023, 2031 and 2037 paper after the auction closes at 09:00 GMT.
The Sarb releases its leading economic indicator for May at 07:00 GMT. The sentiment indicator ticked up 0.2% in April and economists expect slightly more improvement in May.
At 08:00 GMT the Bank will release an annual report on economic growth although coming so soon after an interest rate decision it is not expected to contain much new information.
