Weak fundamentals to keep rand gains in check

Johannesburg - The rand edged higher against the dollar on Monday but was within easy reach of recent three-and-a-half week lows and remained vulnerable to a gloomy outlook for the domestic economy and growth in key commodity consumer China.

The JSE's Top 40 futures index slid 0.8%, suggesting the local bourse would open more than 400 points lower.

By 08:46 the rand was trading 0.58% firmer at R13.7460/$ compared with last Friday's close in New York.

This was despite a slide in Asian markets - which tend to set the tone for the local currency - and soft Chinese factory surveys which stoked global growth concerns.

The rand however remains on shaky ground after Finance Minister Nhlanhla Nene's mini budget last month, which signalled lower economic growth and a widening in the budget deficit.

"Ever since the MTBPS (mini budget) ... the rand has really struggled. Hardly surprising especially in light of a credit rating review due in December," Standard Bank trader Warrick Butler said, alluding to an upcoming review by ratings agency Fitch.

"The rand's latest demise has also not been helped by the general malaise of the Chinese economy," he added, referring to South Africa's heavy reliance on commodity exports to the world's second-largest economy.

In fixed income, the yield on debt maturing in 2026 dipped half a basis point to 8.335%.