Rand on the back foot, bonds weaken

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IOL world currency1 Graphic: Renjith Krishnan.

South Africa's rand held steady against the dollar on Friday after falling the previous day on the back of current account data that suggested Africa's biggest economy was suffering from Europe's waning demand for its exports.

The rand was little-changed at 8.3813 against the dollar at 08:48 SA time from last night's New York close of 8.3800.

“It's unfortunate that global growth fears are filtering into the market again,” said Ion de Vleeschauwer, a trader at Bidvest Bank.

“The market was disappointed that the Fed did not do any quantitative easing earlier in the week. That just put the skids back on the euro and boosted the dollar.”

Global growth concerns are expected to exert more pressure on the currency today as international investors retreat from overseas markets after figures showing China's factory sector shrank for an eighth straight month.

Business activity in the euro area contracted for a fifth straight month and US manufacturing grew at its slowest pace in 11 months, according to data released on Thursday.

Traders said the rand could trade in a wide 8.20-8.50 range, but with a bias towards weakness.

Government bonds also eased, with yields rising 3.5 basis points to 6.075 for the three year bond and 8.08 perform the 14-year paper. - Reuters

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