Rand on back foot, US vote in focus

2012-11-05 09:11

Johannesburg - The rand remained on the defensive against the dollar on Monday after hitting a one-and-a-half week low last Friday, with potential for further losses as the looming US election keeps investors nervous about policies in the world's biggest economy.

The rand was at R8.7675 against the dollar at 06:43 GMT, 0.12% weaker than Friday's close at R8.7570.

The domestic unit slumped more than 1.2% on Friday to its softest level since October 24 as better-than-expected US jobs data boosted the greenback.

Local strikes which have hit output in the world's biggest producer of platinum and a key gold producer are still on investors' minds, but should take a back seat this week to the US vote and other global events in driving the rand.

" We've got quite a big week this week with the US elections, Chinese elections and the potential for Greece to vote around its bailout package," said Brigid Taylor, head of institutional sales at Nedbank

"Unfortunately the gold price has also sold off and all in all South Africa still remains under pressure. The rand could potentially trade up as high as R8.85," Taylor added.

Government bonds weakened slightly, with yields on the benchmark 14-year paper and the shorter-dated three year note each edging up 1.5 basis points to 7.7% and 5.48% respectively.