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Johannesburg - The rand weakened on Friday, tracking a declining euro with European Central Bank chief Mario Draghi continuing to try and put a lid on the single currency's strength by threatening more monetary stimulus.
The euro fell from a 2-1/2 year high, and the rand pulled back from four-month highs against the dollar.
The local unit was trading 0.43% weaker at R10.3800/$. By 16:20 GMT, off a R10.3355/$ close in New York.
South African government bonds rallied to six-month highs on Friday as investors looked for high yields in emerging markets and cheered a smooth national election that saw the ANC retain power.
Yields on benchmark 2026 bonds fell to November 2013 lows, continuing a trend from two weeks ago as emerging markets take advantage of a more risk-positive environment.
Bonds in the past few sessions have been propped by comments from US Federal Reserve chair Janet Yellen that interest rates in the world's largest economy were unlikely to start rising until there was a strong recovery.
"Global sentiment is starting to shift again, and we've been beneficiaries of Yellen's comments this week. This means you're going to see the search for yield in emerging markets continuing," a bond trader in Johannesburg said.
Dealers said South African bonds were also benefiting from asset re-allocation as investors sell Russia because of the Ukraine/Russia geopolitical crisis.
A smooth election in South Africa has also added to positive sentiment towards local assets.
The ANC rolled to election victory, receiving over 62% of the vote with nearly all the ballots counted on Friday. The smooth vote and the retention of power by the ruling party has calmed concerns investors may have had about radical policy change and instability.
"The market was looking for a peaceful election. I don't think they'll be a great policy shake up, which is ultimately what the market has priced in," the dealer said.
The euro fell from a 2-1/2 year high, and the rand pulled back from four-month highs against the dollar.
The local unit was trading 0.43% weaker at R10.3800/$. By 16:20 GMT, off a R10.3355/$ close in New York.
South African government bonds rallied to six-month highs on Friday as investors looked for high yields in emerging markets and cheered a smooth national election that saw the ANC retain power.
Yields on benchmark 2026 bonds fell to November 2013 lows, continuing a trend from two weeks ago as emerging markets take advantage of a more risk-positive environment.
Bonds in the past few sessions have been propped by comments from US Federal Reserve chair Janet Yellen that interest rates in the world's largest economy were unlikely to start rising until there was a strong recovery.
"Global sentiment is starting to shift again, and we've been beneficiaries of Yellen's comments this week. This means you're going to see the search for yield in emerging markets continuing," a bond trader in Johannesburg said.
Dealers said South African bonds were also benefiting from asset re-allocation as investors sell Russia because of the Ukraine/Russia geopolitical crisis.
A smooth election in South Africa has also added to positive sentiment towards local assets.
The ANC rolled to election victory, receiving over 62% of the vote with nearly all the ballots counted on Friday. The smooth vote and the retention of power by the ruling party has calmed concerns investors may have had about radical policy change and instability.
"The market was looking for a peaceful election. I don't think they'll be a great policy shake up, which is ultimately what the market has priced in," the dealer said.
