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Rand volatile in cautious trade

Jun 13 2013 09:39 Reuters
Rand notes

(Shutterstock) (Shutterstock)

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Johannesburg - The rand seesawed in early trade on Thursday as investors refrained from making aggressive bets due to uncertainty over the US bond buying programme and a weak outlook for the domestic economy.

The rand was at R10.0825/$ at 08:41, 0.21% firmer from Wednesday's close of R10.1000 in New York.

It sank to its weakest level since 2009 early on Tuesday, before staging a recovery that was spurred by forecast-beating factory output data and after President Jacob Zuma promised to take a hard line against labour unrest in the nation's mines.

"One gets the sense that market players are still skittish with the lingering uncertainty of another rand blow-out to put on trades that scream value," Rand Merchant Bank said in note.

The rand remains vulnerable as investors cut their holdings of emerging markets assets amid worries of a possible ratcheting down of the US bond buying programme, which has been the source of dollars funding a rally in risky but high-yielding assets.

In tandem with the rand, government bonds also inched lower, breaking two straight days of gains.

The yield for the 2026 issue edged up 6 basis points to 8.005% and that for the 2015 paper rose 5.5 basis points to 6.215%.

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