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Johannesburg - The rand hit a fresh six month low against
the dollar early on Thursday before recouping some of its losses but could
resume a slide towards R8.6 as Europe's debt woes drive investors away from
emerging market assets to perceived safer havens.
The local unit fell to R8.58 to the greenback, its weakest
since late November, before clawing back some ground to R8.5330 by 06:50 GMT.
“There is a possibility of some pull-back as exporters step
in this morning but the real core of the matter still remains this massive
uncertainty in Europe and risk-off associated with that,” said market analyst
Quinten Bertenshaw of ETM.
"The core focus for most people is to stay long dollars
so I would suggest that any dips back towards R8.40 will bring back the buyers
with an eventual target of R8.60,” he added.
Governor Gill Marcus again ruled out any central bank
intervention to support the rand late on Wednesday, saying using foreign
exchange reserves to do this would not be good use of the money.
“If you take that path, you’ve got to have very deep
pockets. We don’t think it is good use of our money. It is very expensive,”
Marcus told a forum.
On Thursday, traders said the market would only pay passing
attention to domestic producer inflation and trade data for April, which should
largely confirm price pressures are fairly benign, while problems in Europe, a
key trading partner for South Africa, continue to constrain local exports.
Government bonds were weaker, with the yield on the three year benchmark rising 2.5 basis points to 6.435% and that for the 14-year issue adding three basis points to 8.405%.
