Johannesburg - The rand steadied against the dollar in early
Tuesday trade, with investors unwilling to take strong positions until after
the US election and a Greek vote that will determine whether it receives more
The outlook for the eurozone, South Africa's biggest trading
bloc, was uncertain because of the pending Greek parliamentary vote to approve or
reject austerity measures that would unlock aid from the IMF and EU.
The rand was at R8.7363 to the dollar at 06:48 GMT, not far
off its R8.7284 close in New York on Monday.
The unit finds support at R8.80, and is unlikely to move out
of Monday's range of between R8.70 and R8.80 in this session.
Results of the US election either in favour of Barack Obama
or his republican opponent Mitt Romney are likely to elicit only a fleeting
reaction in markets as the economy's problems, including the so-called
"fiscal cliff", will remain after the election.
"As we head into the US elections the greater ranging
activity is being maintained across markets," said Judy Padayachee,
technical strategist for Absa Capital.
Although the rand is stuck in a range, a push to weaker
levels at about R8.84 is on the charts, Padayachee added.
Recent data out of South Africa does point to prospects for
a weaker currency once it manages to break out of the range.
The primary concerns are a wide current account and fiscal
deficit, along with increasing joblessness and projected weaker growth because
of lower mining output after three months of strikes.
The business confidence index due on Wednesday is likely to
drop on the prospects for weaker growth, while economists expect manufacturing
activity to have contracted in September, according to data due to be released
Statistics South Africa will release new weightings in the
Consumer Price Index basket at 08:30 GMT, based on an updated survey of
household spending patterns. The changes come into effect early next year.
Treasury will hold its weekly auction at 09:00 GMT, where it
is issuing on the longer end of the yield curve.
Bond yields nudged 0.5 basis points lower to 5.47% on the
four-year note and 7.69% on the 2026 issue.
Results of the sale are due after the auction closes at