Rand pulls back from 10.50

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NewRandMoney Reuters.

Johannesburg - South Africa's rand weakened against the dollar on Monday, pulling further away from its 10.50 resistance level as the dollar received support from upbeat US data.

The rand was down 0.2 percent at 10.6120 to the dollar at 17:48 SA time.

It earlier hit a session low of 10.6380 and looked set for a second day of daily losses after nearing the psychologically important 10.50 level last week.

Data out of the United States showed home builder sentiment at a seven-month high, which cheered the dollar.

Dealers said with key levels going untested on Friday, rand bears were likely to take charge this week.

“The market has edged a bit higher today moving towards the (dollar) resistance at 10.6420. Clearance here would keep the recovery going, with next resistance then coming at 10.6775,” Neil Irving of 4Cast said in a market note.

Yields on government bonds were hardly moved, with the 2015 note edging 1.5 basis points higher to 6.63 percent, while the 2026 issue nudged down a basis point to 8.30 percent.

Emerging markets are highly sensitive to events that might give clues on the Federal Reserve's policy moves, and investors are keenly awaiting Fed Chair Janet Yellen's Jackson Hole speech on Friday.

Before that the United States will release inflation data and the FOMC minutes, while domestically investors' focus will be on July inflation data on Wednesday, with the central bank due to decide on interest rates next month. - Reuters

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