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Johannesburg - The rand steadied against the dollar on Thursday after touching an 8-week high overnight, with nagging concerns about fractious domestic labour relations likely to cap significant gains.
Government bonds yields were higher ahead of producer inflation data expected show an acceleration in the June year-on-year number.
The yield on the 2026 benchmark issue climbed 8.5 basis points to 8.08% and the 2015 paper at the shorter end of the curve was up 5.5 basis points at 6.1%.
The rand traded at R.7600/$ at 06:36 GMT, just 0.13% firmer compared with Wednesday's close.
Despite a recovery in the last couple of weeks, the local currency is still vulnerable to a weak domestic economic outlook while investors are nervous about another flare up in labour tensions in the mining sector.
Mine strikes shaved half a percentage point off 2012 GDP growth and prompted credit downgrades from the three major ratings agencies.
"Although the degree to which the rand has recovered in recent weeks has surprised us, we suspect that by now many of the stale long dollar positions have been stopped out," Absa Capital said in a note.
"This implies that market positioning is ripe for a fresh bout of rand weakness, given that South African fundamental challenges, such as the twin deficits, sluggish growth and lingering labour issues have not disappeared."
Government bonds yields were higher ahead of producer inflation data expected show an acceleration in the June year-on-year number.
The yield on the 2026 benchmark issue climbed 8.5 basis points to 8.08% and the 2015 paper at the shorter end of the curve was up 5.5 basis points at 6.1%.
The rand traded at R.7600/$ at 06:36 GMT, just 0.13% firmer compared with Wednesday's close.
Despite a recovery in the last couple of weeks, the local currency is still vulnerable to a weak domestic economic outlook while investors are nervous about another flare up in labour tensions in the mining sector.
Mine strikes shaved half a percentage point off 2012 GDP growth and prompted credit downgrades from the three major ratings agencies.
"Although the degree to which the rand has recovered in recent weeks has surprised us, we suspect that by now many of the stale long dollar positions have been stopped out," Absa Capital said in a note.
"This implies that market positioning is ripe for a fresh bout of rand weakness, given that South African fundamental challenges, such as the twin deficits, sluggish growth and lingering labour issues have not disappeared."
