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Johannesburg - The rand was a touch softer against the
dollar while government bonds held at multi-month highs on Thursday as the
market digested dovish Reserve Banks comments that suggested domestic rates
will stay at 30-year lows for some time.
The yield on the three year benchmark bond was down two
basis points at an all-time low of 5.94% while that for the equally heavily
traded 14-year paper was at 7.83%, its lowest since early September 2011.
The Reserve Bank said in its annual report on Wednesday
inflation should stay contained within a 3% - 6% target until the end of 2014,
adding that the domestic growth outlook had deteriorated.
“The comments are certainly supportive of a further push
lower in bond yields,” RMB said in a market note.
The rand was largely steady against the dollar in early
trade, losing some of the steam that had pushed it to its strongest levels
since mid-May earlier in the week.
By 06:53 GMT the currency was at R8.1403/dolar, little
changed from Wednesday’s close at R8.1361.
The rand would take its cue largely from global currency
moves ahead of European Central Bank and Bank of England policy meetings later in the day, as well as
US jobs data due out on Friday, market watchers said.
Signs of further policy easing from developed countries
which are already sitting on near-zero rates could be supportive of the local
currency, Standard Bank trader Warrick Butler said.
“If there is cheap G7 cash going around then you have to expect that a lot of it will flow into the high yielders such as the rand,” Butler said.
