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Johannesburg - The rand was back under pressure against the
dollar on Wednesday, with last week’s five-month lows in sight as investors
again spurned emerging market assets on rising fears debt-ridden Greece might
leave the eurozone.
South Africa trades heavily with the zone, and thus the rand
tends to closely track the fortunes of the common currency , which traded near
recent four-month lows against the greenback.
The rand was 0.44% softer at R8.3770 to the dollar by 06:31
GMT, compared with Tuesday’s close at R8.34. It was not too far off last week’s
low of R8.4475, its weakest since December 14.
“This morning it’s all falling apart again and it’s the same
old story really, the euro has taken a dive overnight and the fear that the
exit of Greece is almost a certainty now has put the fear into the market
again,” Bidvest Bank chief dealer Ion de Vleeschauwer said.
“That’s going to dump Europe into a bigger pile of chaos
than people initially thought, so it’s back to risk aversion in a big way and
we’re going to head back to those weak levels we were at last week.”
Government bonds followed suit, with the yield for the 2015
paper, which trades heavily on the secondary market, gaining 5.5 basis point to
6.38% and that for the 14-year paper adding five basis points to 8.315%.
With the market focus firmly on Europe, traders said
domestic consumer inflation due out at 08:00 should have little impact unless
it surprises the market.
A survey of 17 economists last week saw the CPI gauge
quickening slightly to 6.2% year-on-year in April, again breaching the top end
of the Reserve Bank’s 3-6 target band.
However, the data may well help direct the tone of the Reserve Bank’s policy statement on Thursday, when it is widely expected to keep the repo rate at a three-decade low of 5.5%.
