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Johannesburg - The rand was slightly firmer against the
dollar on the second trading day of the year on Tuesday and should stay largely
range-bound as market players drift slowly back after the Christmas and New
Year breaks.
Local traders returned to the market on Tuesday after local
exchanges were closed for a post-New Year public holiday in South Africa on
Monday.
By 06:39 GMT the local currency was up 0.28% on the day at
R8.0520 to the dollar, compared with Monday’s close at R8.0750.
“The rand is slightly higher; we did see it testing the lows
of the day, but it’s still thin liquidity at the moment, so it’s going to be
quite difficult,” RMB trader Lee Naisbitt said.
“I think for now we’re still in a range. If we manage to get
through R8.03 we should target a bit lower (a firmer rand). But to start off
the day we’re looking at R8.03 to R8.08. It’s going to be quite erratic and pretty
rangebound this week.”
The rand, a highly liquid currency, plunged nearly 22% against
the dollar in 2011 in one of the steepest global falls, taking the brunt of an
emerging market asset sell-off as investors worried about the effects of a debt
crisis in the eurozone.
On Tuesday the rand took its cue from Europe’s common
currency, which edged higher against the dollar and the yen but looked set to
remain under pressure in 2012.
Government debt was flat as the Johannesburg bond exchange
resumed trade for the year, with the heavily traded 2015 issue unchanged from
its December 30 close of 6.73%, as was the longer dated 2026 bond at 8.485%.
South African high-yielding bonds held up well despite last
year’s global flight from higher-risk assets, with net foreign inflows in 2011
reaching about R48bn, according to data from the local exchange.
