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Johannesburg - The rand was largely flat against the dollar on Tuesday, but could come under pressure ahead of the SA Reserve Bank's latest quarterly bulletin, which is expected to show a sizeable widening of the current account deficit.
The rand remains vulnerable to negative domestic news after falling as much as 1.3% on Friday when agency Fitch cut its outlook for South Africa while Standard and Poor's downgraded its rating outright.
South African markets were closed on Monday for a public holiday.
At 08:44 the rand was trading at R10.7610 to the dollar, barely shifted from Monday's offshore close in New York at R10.7565.
Friday's downgrades reflected the ratings agencies' concerns about the poor prospects for Africa's most advanced economy, which contracted in the first quarter of the year mainly due to a platinum strike now in its fifth month.
The leader of Amcu indicated last week that a deal to end the strike was imminent, but miners and platinum producers have not yet reached an agreement.
"The rand remains vulnerable to SA's weak fundamental backdrop over the medium term," Barclays Africa said in a note.
"The fact that the reported wage deal in the platinum sector has yet to be signed also detracts from a rand recovery."
The SA Reserve Bank's quarterly bulletin due out on Wednesday could deal another blow to the currency, with economists polled by Reuters expecting it to show the current account deficit widened to 6.1% of GDP in the first quarter from 5.1%.
Government bonds were slightly down in early Tuesday trade and yields for the benchmark 2026 and 2015 issues each added 1 basis point to 8.25% and 6.7% respectively.
The rand remains vulnerable to negative domestic news after falling as much as 1.3% on Friday when agency Fitch cut its outlook for South Africa while Standard and Poor's downgraded its rating outright.
South African markets were closed on Monday for a public holiday.
At 08:44 the rand was trading at R10.7610 to the dollar, barely shifted from Monday's offshore close in New York at R10.7565.
Friday's downgrades reflected the ratings agencies' concerns about the poor prospects for Africa's most advanced economy, which contracted in the first quarter of the year mainly due to a platinum strike now in its fifth month.
The leader of Amcu indicated last week that a deal to end the strike was imminent, but miners and platinum producers have not yet reached an agreement.
"The rand remains vulnerable to SA's weak fundamental backdrop over the medium term," Barclays Africa said in a note.
"The fact that the reported wage deal in the platinum sector has yet to be signed also detracts from a rand recovery."
The SA Reserve Bank's quarterly bulletin due out on Wednesday could deal another blow to the currency, with economists polled by Reuters expecting it to show the current account deficit widened to 6.1% of GDP in the first quarter from 5.1%.
Government bonds were slightly down in early Tuesday trade and yields for the benchmark 2026 and 2015 issues each added 1 basis point to 8.25% and 6.7% respectively.
