Johannesburg - The rand was steady in early Tuesday trade,
stuck in a wide range set on Friday, with little in the way of market events to
push the currency in a firm direction until later this week.
Central bank reserves data, which came in slightly higher
and overshot market expectations for July, failed to move the rand out of the
Stock of gold and foreign exchange reserves inched up by
$39m in July to $47.975bn, while gross reserved rose by $180m to $49.398 in the
The forward position - the banks unsettled spot or swap
transactions - fell to $6.092 from $6.221bn in June.
The rand shrugged off the positive data, sticking to its closing R8.17/dollar level by 06:15
GMT. The local unit needs to break out of Friday’s range between R8.12 and
R8.38 to open up new levels, analysts said.
In the session R8.15 will provide a barrier and a break out
from R8.12 will open up resistance around R8.11.
“Importers as of yesterday found levels towards R8.1500 a
little more attractive and that is expected to be the case again today,” said
research house Tradition Analytics.
“As a result, the strategy remains to look for a R8.13/2500
range to hold through the day, with a slight preference to buying dollars
towards or below R8.1500.”
Yields on government debt nudged higher ahead of a weekly
bond auction. Treasury has offered R2.1bn spread between its 2023, 2041 and
2048 issues. Results are due after auction closes at 09:00 GMT.
The benchmarks rose 1.5 basis points each to 5.485% on the
2015 and 7.3% on the 2026 bond.
Later in the session the market will look to a business sentiment
survey at 09:30 GMT to get clues on where the economy may be headed according
to the level of confidence in the economy shown by local managers.
Manufacturing data on Wednesday may shake the rand out of
its lull, where economists polled by Reuters expect the production index to
have eased to 3.2% in June from 4.2% in May.