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Rand seen range-bound with weaker bias

Feb 08 2013 09:37
Johannesburg - The rand is expected to remain range-bound in the days ahead, continuing a lacklustre recovery from a four-month low hit late last month.

The rand was at R8.9077/$ at 08:38 on Friday, largely unchanged from Thursday's New York close.

After falling to R9.16/$ at the end of January, the rand has clawed its way back to trade below R9 this week but still remains vulnerable.

"For now, it remains on a weaker bias looking for higher levels," said Brigid Taylor, head of institutional sales at Nedbank. "At the moment, pretty much range-bound between R8.80 and R9."

European Central Bank President Mario Draghi's comments on Thursday about risks to the eurozone economy fuelled demand for safe-haven assets such as US Treasuries, which could add to pressure on the rand, Taylor said.

"You're going to start seeing offshore markets move in tandem with what happened yesterday with regard to the ECB," she said. "It poses upside risks to the rand. Safer haven assets have rallied."

Government bonds were firmer, with the 2015 paper  yielding 5.3%, a 2 basis point drop from the previous day, while the 2026 instrument was 0.5 basis points lower at 7.315%.

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rand  |  currencies  |  markets bonds


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