Publications
Partners
Johannesburg - The rand rallied to its strongest level in nearly a week against the dollar on Monday as market players unwound long dollar positions accumulated during the recent bout of global risk aversion.
Government bonds were also firmer, and yields retreated as the market expects Finance Minister Pravin Gordhan on Februaury 26 to keep a firm grip on public spending when he unveils the 2014 budget on Wednesday.
The yield on the 2026 instrument, the benchmark for the secondary market, shed 3 basis points to 8.625% compared with Friday's close.
The 2015 bond at the short end of the yield curve fell 8.5 basis points to 7.245%.
By 15:58 GMT the rand was trading at R10.8580/$ to the greenback, a 0.7% gain over its previous close at the New York session.
"To be frank, we have to retrace today's steps to Friday, when we had what was a fairly long-dollar market which caused a move from 11.01 all the way down to the 10.90's," said Nedbank FX trader William Van Rijn.
"Today we've had a continuation of the same pattern, the market appears to be slightly long (dollars) because over the past few sessions risk has been a bit of an issue and now we've had a little bit of local selling interest emerge."
The global risk aversion which has weighed on emerging markets abated on Monday, partly aided by some easing of political tensions in Ukraine.
On the local front, focus this week will be on fourth quarter economic growth numbers due on Tuesday and Gordhan's release of the budget, which is likely to show restraint even as his governing ANC party braces for elections on May 7.
Government bonds were also firmer, and yields retreated as the market expects Finance Minister Pravin Gordhan on Februaury 26 to keep a firm grip on public spending when he unveils the 2014 budget on Wednesday.
The yield on the 2026 instrument, the benchmark for the secondary market, shed 3 basis points to 8.625% compared with Friday's close.
The 2015 bond at the short end of the yield curve fell 8.5 basis points to 7.245%.
By 15:58 GMT the rand was trading at R10.8580/$ to the greenback, a 0.7% gain over its previous close at the New York session.
"To be frank, we have to retrace today's steps to Friday, when we had what was a fairly long-dollar market which caused a move from 11.01 all the way down to the 10.90's," said Nedbank FX trader William Van Rijn.
"Today we've had a continuation of the same pattern, the market appears to be slightly long (dollars) because over the past few sessions risk has been a bit of an issue and now we've had a little bit of local selling interest emerge."
The global risk aversion which has weighed on emerging markets abated on Monday, partly aided by some easing of political tensions in Ukraine.
On the local front, focus this week will be on fourth quarter economic growth numbers due on Tuesday and Gordhan's release of the budget, which is likely to show restraint even as his governing ANC party braces for elections on May 7.
