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Johannesburg - The rand ended the week on a firmer footing against a broadly weak dollar on Friday but kept within the previous day's trading range as concerns about more domestic labour strife kept the pressure on South Africa's currency.
The dollar has been undermined by weaker US economic data that has added to beliefs the Federal Reserve may not be tightening policy soon. It fell to a one-month low against major currencies, helping to boost most emerging-market assets.
However, concerns about a planned strike by 220 000 members of South Africa's metalworkers union limited rand gains.
At 14:31 GMT, the rand was at R10.6150/$, 0.2% firmer than its close in New York on Thursday.
Dealers said even though the rand briefly broke through 10.60 resistance on Friday, it was uncertain whether it could manage further gains or sustain them.
The rand will have to contend with trade data on Monday, numbers that are usually a sore point for the local currency.
South Africa's wide current account deficit is heavily dependent on offshore inflows and weak export numbers exacerbate the vulnerability.
Barclays Africa said the rand still faced many risks and it could test the 11 to the dollar mark over the next three months.
"South Africa's large external funding requirements make the rand particularly vulnerable to the prospect of a normalization of Fed monetary policy and an associated abatement of capital inflows," analyst Peter Worthington said in a quarterly market note.
"Weaker commodity prices are also a risk, particularly if China stumbles. Against a backdrop of relatively loose monetary policy and relatively weak growth, South Africa's credit ratings and fractious labour markets also pose risks for the rand during the second half of the year."
Government bonds also ended slightly firmer, with the yield on the benchmark 2026 issue easing to 8.31%.
The dollar has been undermined by weaker US economic data that has added to beliefs the Federal Reserve may not be tightening policy soon. It fell to a one-month low against major currencies, helping to boost most emerging-market assets.
However, concerns about a planned strike by 220 000 members of South Africa's metalworkers union limited rand gains.
At 14:31 GMT, the rand was at R10.6150/$, 0.2% firmer than its close in New York on Thursday.
Dealers said even though the rand briefly broke through 10.60 resistance on Friday, it was uncertain whether it could manage further gains or sustain them.
The rand will have to contend with trade data on Monday, numbers that are usually a sore point for the local currency.
South Africa's wide current account deficit is heavily dependent on offshore inflows and weak export numbers exacerbate the vulnerability.
Barclays Africa said the rand still faced many risks and it could test the 11 to the dollar mark over the next three months.
"South Africa's large external funding requirements make the rand particularly vulnerable to the prospect of a normalization of Fed monetary policy and an associated abatement of capital inflows," analyst Peter Worthington said in a quarterly market note.
"Weaker commodity prices are also a risk, particularly if China stumbles. Against a backdrop of relatively loose monetary policy and relatively weak growth, South Africa's credit ratings and fractious labour markets also pose risks for the rand during the second half of the year."
Government bonds also ended slightly firmer, with the yield on the benchmark 2026 issue easing to 8.31%.
