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Johannesburg - The rand steadied against the dollar on
Wednesday and could test the psychologically key level of R8.00 after comments
from US Federal Reserve Chairperson Ben Bernanke improved sentiment.
Bernanke said he would do what was necessary to support
growth in the world’s largest economy, encouraging bets on high-risk assets.
The rand was trading at R8.11 against the dollar at 06:53
GMT, not far from Tuesday's New York close of R8.10. It has recovered from a
near-two week low of R8.3528 hit on Tuesday.
"The mood has improved somewhat and risk is slightly
more favourable," said Brigid Taylor, head of institutional sales at
Nedbank, adding the rand could target R8.00 to the dollar.
"We expect some support for our JSE today after the
rally offshore," she said.
The JSE's Top 40 - (Tradeable) [JSE:J203] December futures
contract was up 0.9% before the start of trade at 07:00 GMT, pointing to a
positive open on the bourse.
But news that ratings agency Moody's downgraded Italy by three notches overnight could make dealers wary of taking significant risky positions.
"We still feel the rand is likely to trade towards the
upside but not with the aggression of the last few days like the R8.34 we saw
yesterday," said Jim Bryson, dealer at RMB.
"We expect volatility because it's very much a headline-driven market."
Government bonds started on a slightly firm note. The yield
on the 2015 bond down 8.5 basis points to 6.875% and that on the 2026 bond down
5.5 basis points to 8.575%.
