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Johannesburg - The rand traded within a steady range against
the dollar in early Wednesday trade but could come under pressure from what
traders expect to be a sharply wider trade deficit caused by wage strikes in
the mining sector hitting exports.
The rand was at R8.65 against the dollar at 06:46 GMT, just 0.06% off Tuesday’s close at
R8.6450.
“We’re still very range-bound at the moment. With New York
being out the last two days the rand hasn’t really moved too much and I expect
the same today,” Rand Merchant Bank trader Lee Naisbitt said.
The rand would need to break out of its current R8.62-72
band in order give a decisive direction, he added. Trade data due out at 12:00
GMT could weaken the currency if it comes in worse than market expectations of
a R10bn deficit.
“With the massive current account defict (6.4% of GDP) that
we’ve got as well, if we do see a bit of a worse trade number you’ll probably
you see the rand under a little bit of pressure, but within the range,”
Naisbitt said.
The currency has clawed back some ground after tumbling to a
three-and-a-half year low earlier this month, nearly hitting R9.0/dollar as
investors fretted about the impact of strikes in the mining and transport
sectors.
On Tuesday the Reserve Bank said the weaker rand posed a
risk to South Africa’s inflation outlook.
Government bonds edged higher, with the yield on the three-year benchmark dipping 1.5 basis points to 5.475% and that for the 14-year issue shaving off half a basis point to 7.74%.
