Rand eyes 5-year lows again as demand wanes

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NewRandMoney Reuters.

Johannesburg - South Africa's rand hovered near the previous day's five-year low versus the dollar on Tuesday as nagging concerns about the weak outlook for the economy dampened investor appetite.

By 08:52 SA time the rand was changing hands at 10.8350 to the dollar, barely changed from Monday's New York close of 10.8250.

It was within easy reach of the previous day's session low of 10.8400, its softest level since last 2008.

The rand had rallied on Friday and early Monday after weak US payrolls data dented the case for a quick tapering of the Federal Reserve's monthly bond purchases, a programme which resulted in flows into high-yielding emerging markets.

“Most participants are reluctant to build long rand positions because the dollar is still likely to strengthen this year on the back of an improving US economy,” said Absa Capital in a market note.

“The rand is likely to remain plagued by South Africa's poor fundamentals.”

In fixed income, government bonds retreated, nudging the yield on the 2026 benchmark 4 basis points higher to 8.215 percent while the paper maturing in 2015 added 2 basis points to 6.18 percent. - Reuters

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