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Johannesburg - The rand weakened slightly on Tuesday morning as the dollar regained some strength after upbeat US retail sales data buoyed the greenback.
The rand ended weaker on Monday amid signs of the world's biggest economy bouncing back, and as political tension in Ukraine depressed investors' appetite for risky emerging market assets.
The dollar-supportive environment is likely to see the rand extend three days of losses that took it to a week-low in the previous session, analysts said.
At 06:45 GMT, the rand was at R10.5240 to the dollar, slightly weaker than a R10.5170 close in New York on Monday.
Analysts said the weakness of the euro against the dollar, after the European Central Bank signalled a continuation of loose monetary policy, would be the main driver of dollar/rand in the session.
Investors are waiting for Chinese economic growth numbers on Wednesday, which should determine sentiment towards rand - often a resource-driven currency - towards the end of a shortened trading week in South Africa.
Bonds tracked the rand and yields remained near one-week highs on the benchmark government debt, with the outlook bearish ahead of the Chinese GDP data.
"Sentiment towards local bonds has seemingly soured, with the rally in yields running out of steam," said Thando Vokwana, a bond trader at Rand Merchant Bank.
Yields nudged up half a basis point to 8.39% on the 2026 benchmark bond and 6.77% on the 2015 note.
"Local institutions and hedge funds' behaviour of late would reflect a neutral-to-bearish outlook on yields in the short term and that is of some worry heading into this morning's nominal government bond auction," Vokwana added.
Treasury is auctioning R2.35bn in 2030, 2037 and 2048 paper in the session. Results are due after 09:00 GMT.
The rand ended weaker on Monday amid signs of the world's biggest economy bouncing back, and as political tension in Ukraine depressed investors' appetite for risky emerging market assets.
The dollar-supportive environment is likely to see the rand extend three days of losses that took it to a week-low in the previous session, analysts said.
At 06:45 GMT, the rand was at R10.5240 to the dollar, slightly weaker than a R10.5170 close in New York on Monday.
Analysts said the weakness of the euro against the dollar, after the European Central Bank signalled a continuation of loose monetary policy, would be the main driver of dollar/rand in the session.
Investors are waiting for Chinese economic growth numbers on Wednesday, which should determine sentiment towards rand - often a resource-driven currency - towards the end of a shortened trading week in South Africa.
Bonds tracked the rand and yields remained near one-week highs on the benchmark government debt, with the outlook bearish ahead of the Chinese GDP data.
"Sentiment towards local bonds has seemingly soured, with the rally in yields running out of steam," said Thando Vokwana, a bond trader at Rand Merchant Bank.
Yields nudged up half a basis point to 8.39% on the 2026 benchmark bond and 6.77% on the 2015 note.
"Local institutions and hedge funds' behaviour of late would reflect a neutral-to-bearish outlook on yields in the short term and that is of some worry heading into this morning's nominal government bond auction," Vokwana added.
Treasury is auctioning R2.35bn in 2030, 2037 and 2048 paper in the session. Results are due after 09:00 GMT.
