Rand steady ahead of rates meeting

2012-11-19 09:11

Johannesburg - The rand continued to drift upwards against the dollar on Monday after coming close to a 3-1/2 year low last week, but it is likely to remain range-bound ahead of the South African Reserve Bank's rate-setting meeting this week.

The rand was at R8.8448/$ at 08:41 on Monday, 0.3% firmer than Friday's New York close.

It marked a recovery from its low of R8.9909 on Thursday when concerns about a new wave of protests by farm workers in the Western Cape province and weak GDP data from the euro zone weighed on the currency.

The rand could remain stuck in the 8.80-8.90 range this week, mirroring the euro, which has been trading in a narrow band, said Jim Bryson, an FX trader at Rand Merchant Bank.

"No excitement in the euro," he said. "I think we won't get much excitement in the rand either. It really starts to feel like we're drifting to the end of the year now."

Trading activity is also likely to be muted ahead of the Sarb's Monetary Policy Committee meeting on Thursday, Bryson added. The MPC is expected to leave the repo rate unchanged at 5%.

Consumer inflation data for October will be released on Wednesday. A Reuters survey of 19 economists suggests inflation slowed to 5.4% in October, from 5.5% the previous month.

Government bonds were steady, with the yields on the 2026 paper and the 2015 instruments barely changed at 7.64% and 5.45% respectively.