Johannesburg - South Africa's rand weakened slightly against the US dollar on Monday, opening the week on the back foot as investors analysed President Jacob Zuma's new cabinet and ahead of expected weaker economic growth data in the next session.
Zuma announced his new team for his second five-year term on Sunday, appointing former deputy finance minister Nhlanhla Nene as finance minister, while Pravin Gordhan moved to handle local government.
“The local cabinet is mostly business as usual but is less business-friendly than the market expected - or at least hoped,” John Cairns, technical strategist at Rand Merchant Bank wrote to clients.
Rand trading was expected to be lacklustre as the United States and Britain were away for national holidays, dealers said.
At 08:48 SA time, the rand was down 0.2 percent to 10.3240 to the dollar, off a 10.3040 close in New York on Friday.
“With the US and UK enjoying a long weekend, we are settling for near-term extension of the recent consolidation in dollar rand,”,” said Judy Padayachee, technical strategist at Barclays Africa.
“We continue to watch the 10.27 and 10.45 levels into month-end to provide direction,” Padayachee added.
Economists have forecast data on Tuesday to show quarter-on-quarter GDP to fell 0.1 percent, from 3.8 percent growth in the fourth quarter of last year.
Yields on government bonds held steady at 8.05 percent on the benchmark 2026 issue and at 6.55 percent on the 2015 note. - Reuters