Johannesburg - The rand firmed in early trade on Tuesday,
getting a temporary reprieve against the dollar as investors preferred to stay
out of the market due to coming policy meetings at home and abroad.
The rand was at R8.4674, 0.25% firmer than its R8.4875 New York close on Monday.
Analysts say technical signals show a temporary breather in the overall bearish
trend for the currency.
“We would not be surprised to see some stalling before
decisive breakouts occur,” said Judy Padayachee, technical strategist for Absa
However the rand is expected to get back on a weaker path
going into next month.
“Bigger picture, we remain rand bearish into the third
quarter and target 8.80-9.00 against the dollar,” Padayachee said.
For the session the rand should find support at R8.50, a key
Dealers say turnover was poor on Monday as investors wait on
key events towards the end of the week, when activity should pick up as the
European summit on Thursday and Friday coincides with month-end activity for
The ANC policy conference will start during the session,
where the ruling party will draw up policy for the next five years.
Debates at the conference will keep investors nervous about
the potential of more state control in key sectors of the economy such as
mining sector and the central bank.
Bond yields were up three basis points each on the benchmark
government paper to 6.11% on the three-year note and 8.125% on the 14-year issue.
Government is looking to place two new issues at an auction
later in the session, with R800m of the 2023 bond and R500m of the 2048, along
with R800m of the 2031 issue. The results are due at 09:00 GMT and dealers
expect keen interest on the new paper.