Rand seen rangebound with weaker bias

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IOL world currency1 Graphic: Renjith Krishnan.

Johannesburg - South Africa's rand is expected to remain rangebound in the days ahead, continuing a lacklustre recovery from a four-month low hit late last month.

The rand was at 8.9077 to the dollar at 08:38 SA time on Friday, largely unchanged from Thursday's New York close.

After falling to 9.16 against the dollar at the end of January, the rand has clawed its way back to trade below 9 this week but still remains vulnerable.

“For now, it remains on a weaker bias looking for higher levels,” said Brigid Taylor, head of institutional sales at Nedbank. “At the moment, pretty much rangebound between 8.80 and 9.”

European Central Bank President Mario Draghi's comments on Thursday about risks to the euro zone economy fuelled demand for safe-haven assets such as US Treasuries, which could add to pressure on the rand, Taylor said.

“You're going to start seeing offshore markets move in tandem with what happened yesterday with regards to the ECB,” she said. “It poses upside risks to the rand. Safer haven assets have rallied.”

Government bonds were firmer, with the 2015 paper yielding 5.3 percent, a 2 basis point drop from the previous day, while the 2026 instrument was 0.5 basis points lower at 7.315 percent. - Reuters


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