• IS provokes sea-change

    It has been a grave mistake to defy both Russia and France, says Leopold Scholtz.

  • Nene's SAA nemesis

    No political figure seems to have the guts to speak out against Dudu Myeni, says Solly Moeng.

  • The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

All data is delayed
See More

Rand softer, bonds flat

Jan 23 2013 09:29
Johannesburg - The rand remained under pressure against the dollar on Wednesday and bond yields looked set to trend higher as reports of violent protests added to uncertainty over the outlook for the struggling economy.

Consumer inflation data due at 10:00 is likely to  cement the market view that the Reserve Bank will leave interest rates unchanged on Thursday, especially if the data surprises above market expectations of a 5.7% year-on-year rise.

The rand was at R8.8850/$ at 09:00, slipping 0.34% from Tuesday's New York close at R8.8550.

Government bonds were little-changed from overnight levels, with the yield on the benchmark note due in 2026 flat at 7.255% and that for the 2015 bond adding one  basis point to 5.36%.

"Price action has been pretty poor with some offshore disinvestment, and with the currency lagging so are other asset classes. South Africa is definitely falling behind its emerging market peers right now," Citi bond trader Mark Southworth said.

"I'm not sure if we're going to have a real panic sell-off but it does look as if yields can drift a little bit higher today."

Foreign investors have been reluctant to buy strongly into local assets this year as Africa's biggest economy grapples with instability in the mining sector after violent strikes last year that hit economic growth.

Investors are now nervous that protests in the industrial town of Sasolburg, where residents have burnt vehicles, barricaded streets and looted shops, could signal a new wave of the unrest in townships over poor basic services.

"There is still potential for the rand to react negatively to headlines," said Standard Bank trader Warrick Butler, predicting a R8.82-90 range for the currency in Wednesday's session.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

rand  |  currencies  |  markets bonds



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote