Johannesburg - The rand softened marginally against the
dollar in early trade on Thursday but is expected to remain in a tight range as
local traders await the resolution of talks to resolve the so-called
"fiscal cliff" in the United States.
The rand, which has failed to break out of an R8.80-R9.00
range during the last week, was trading at R8.8210 to the greenback at 06:46
GMT.
The euro firmed as the United States Congress pushed toward
compromise on a deal to resolve the fiscal cliff, but agreement still appeared
elusive, keeping emerging market investors on edge.
"The currency market at the moment is relatively
lacklustre, said Brigid Taylor, head of institutional sales at Nedbank. "The
US is now in the spotlight and we could potentially see deterioration."
Government bonds recovered from yesterday's losses with
yields falling 2.5 basis points on the benchmark 2026 paper and 4 basis points
to 5.47% on the 2015 note.
Bonds weakened and yields edged higher during the previous
session when Reserve Bank Governor Gill Marcus, addressing a conference of
South Africa's metal-workers union, reiterated a hawkish tone on inflation,
denting hopes for interest rate cuts.