Johannesburg - South Africa's rand firmed slightly against the dollar in early trading on Friday, but could come under renewed pressure if trade data due later in the session shows a widening deficit.
The rand was at 10.3350 to the dollar at 06h13 GMT, up 0.2 percent from Thursday's New York close.
It has been recovering from a four-year low of 10.510 hit on Wednesday as emerging market currencies sold off on fears of possible Western military action in Syria.
Domestic factors will have also weighed on the rand, including a strike in the car manufacturing sector, which is a vital source of exports.
Walkouts by gold miners and workers at petrol stations and car dealerships could start next week, and have the potential to slow growth.
Trade data due at 12h00 GMT could also push the rand weaker if South Africa's trade deficit widens, adding to concerns about its twin budget and current account deficits.
The trade gap narrowed to R7.71-billion in June from R11.03-billion the previous month, but economists polled by Reuters expect a shortfall of R8.9-billion in July.
“The rand has typically retained a status of one of the riskier emerging market currencies and this is still relevant currently given the wide twin deficits, on-going strike action and threat of more low-growth and over-spending induced fiscal risks,” Tradition Analytics wrote in a morning note.
“The expected widening of the trade deficit in July will provide a reminder of our ever-increasing external funding needs.”
The yield on the 2026 government bond declined 5 basis points to 8.515 percent and that on the 2015 paper fell 7 basis points to 6.54 percent. - Reuters