Rand regains footing after losses

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NewRandMoney

Reuters.

Johannesburg - South Africa's rand recovered some of its poise on Friday after tumbling to five-year lows against the dollar overnight, although weak economic fundamentals point to further losses ahead.

The local unit was trading at 10.6275 against the greenback by 16:57 SA time, a 0.5 percent gain from Thursday's close at 10.6865.

The rand had fallen nearly 2 percent to 10.7000 on Thursday, its weakest since December 2008, as investors bailed out of riskier assets.

Trade was thin, with most market players yet to return from year-end holidays.

“There hasn't really been anything driving the market today, no economic data or anything,” a Johannesburg currency dealer said.

“We just had guys squaring off ahead of what should be a more active market next week.”

Government debt also recovered after Thursday's sell-off.

Yields inversely turned lower, with the issue due in 2026, the benchmark for the secondary market, dipping three basis points to 8.275 percent.

The yield for paper maturing in 2015 retreated 2.5 basis points to 6.21 percent.

The rand remains hostage to wide deficits on South Africa's budget and current account, at around 5 percent and 7 percent respectively.

They led the currency to shed about a quarter of its value against the dollar in 2013, its biggest 12-month drop against the greenback since plunging nearly 40 percent in 2008. - Reuters


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