Johannesburg - The rand ticked up slightly against the
dollar on Tuesday although concerns about the banking sectors of some European
countries are expected to keep a lid on risk appetite and curb gains by
emerging market assets.
The main focus for the day should be on the debt problems in
Europe, but domestic GDP data due out at 09:30 GMT will be the latest gauge on
whether Africa’s largest economy needs more stimulus in the form of interest
rate cuts later this year.
At 06:28 GMT, the rand traded at R8.3215 against the dollar,
0.31% firmer than Monday’s close of R8.3475.
Some analysts say the rand is looking oversold after
weakening 7.8% so far this month on fears that if countries like Greece are
forced into a chaotic departure from the eurozone, South Africa would be rocked
by the damage in its major export market.
“Today I continue to favour the R8.28 - R8.40 range,
cautious that we are still due a correction in stale short-term long dollar
positions but happy to take advantage of any major move lower to get long
again,” Standard Bank trader Warrick Butler said in a note.
“Bear in mind that today is also the start of corporate
month-end and demand will pick up from local importers.”
Government bonds weakened slightly in early trade, nudging
the yield on the three year paper 1.5 basis points higher to 6.38% while that
for the 14-year issue added a basis point to 8.34%.
Yields could head lower if data from Statistics South Africa
points to lower growth in the first quarter of the year, with economists polled
by Reuters last week seeing a slowdown to 2.4% in Q1 from 3.2% in Q4 2011.