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Johannesburg - The rand recovered its footing against the dollar on Wednesday after a surprise rate hike in China triggered a sharp fall the day before.
The currency could revisit recent near-three-year highs as investors drift back to riskier assets.
The blue-chip futures contract traded largely flat before the start of trade on the JSE securities exchange at 09:00.
At 08:42, the rand was up 0.39% at 6.9850 to the greenback compared with Tuesday's close at 6.9850.
The domestic currency had plumbed a two-week low of 6.99 on Tuesday after China's decision to raise interest rates sent commodity-driven emerging market currencies weaker.
Comments by South African Reserve Bank Governor Gill Marcus that domestic monetary policy would stay accomodative for some time in the face of low inflation and a struggling economy also weighed on the rand.
"The Chinese hiking rates ... saw a sell-off across most riskier assets. We've seen a sell-off in the Aussie dollar, the Canadian dollar and the rand fell on the back of that," said RMB trader Brigid Taylor.
"But we think that this is going to be short-lived because the bigger picture still is around the quantitative easing or potential second round of quantitative easing around the United States, which is still driving risk."
"I think this is an opportunity for some dip-buying and we're still in that range of about 6.80 to 7.00," Taylor added.
The rand has gained more than 27% against the dollar since the start of 2009 and about 6.9% this year as investors go for high-yielding assets.
Latest data shows foreigners bought a net of R3.68bn of South African bonds in the week to Oct. 15, for a cumulative total of R70.8bn of bonds in the year to date, nearly six times the same period last year.
The JSE's blue-chip top-40 December future was 0.07% lower, pointing to a flat open for the bourse after stocks ended in the red the previous day.
Government bonds edged higher, and the yields on the 2015 note and 2026 notes added three basis points each to 7.13% and 8.045% respectively.
The currency could revisit recent near-three-year highs as investors drift back to riskier assets.
The blue-chip futures contract traded largely flat before the start of trade on the JSE securities exchange at 09:00.
At 08:42, the rand was up 0.39% at 6.9850 to the greenback compared with Tuesday's close at 6.9850.
The domestic currency had plumbed a two-week low of 6.99 on Tuesday after China's decision to raise interest rates sent commodity-driven emerging market currencies weaker.
Comments by South African Reserve Bank Governor Gill Marcus that domestic monetary policy would stay accomodative for some time in the face of low inflation and a struggling economy also weighed on the rand.
"The Chinese hiking rates ... saw a sell-off across most riskier assets. We've seen a sell-off in the Aussie dollar, the Canadian dollar and the rand fell on the back of that," said RMB trader Brigid Taylor.
"But we think that this is going to be short-lived because the bigger picture still is around the quantitative easing or potential second round of quantitative easing around the United States, which is still driving risk."
"I think this is an opportunity for some dip-buying and we're still in that range of about 6.80 to 7.00," Taylor added.
The rand has gained more than 27% against the dollar since the start of 2009 and about 6.9% this year as investors go for high-yielding assets.
Latest data shows foreigners bought a net of R3.68bn of South African bonds in the week to Oct. 15, for a cumulative total of R70.8bn of bonds in the year to date, nearly six times the same period last year.
The JSE's blue-chip top-40 December future was 0.07% lower, pointing to a flat open for the bourse after stocks ended in the red the previous day.
Government bonds edged higher, and the yields on the 2015 note and 2026 notes added three basis points each to 7.13% and 8.045% respectively.
