Rand steady, may soften on risk aversion

Johannesburg - The rand traded in a narrow range against the dollar early on Friday but could soften into the weekend as political turmoil in Russia and Iraq drains appetite for risky assets.

The local unit was at R10.7765 to the dollar at 09:01, barely changed from its close at R10.7650 on Thursday.

Government debt reversed some of the previous day's gains, with yields for the secondary market benchmark due in 2026 edging up 3.5 basis points to 8.295%.

The 2015 bond at the shorter end of the yield curve rose by the same margin to 6.685%.

Ongoing political tensions in Russia and Iraq would continue to benefit safe haven currencies such as the dollar at the expense of higher-yield emerging markets that are perceived as carrying more risk, analysts said.

"The rand could continue drifting weaker into the weekend toward the top end of the 2-month trading range of R10.46 to R10.85/$," Barclays Africa predicted in a market note.