Rand softer ahead of trade dataComment on this story
Johannesburg - South Africa's rand traded softer than its previous close against the dollar on Thursday and could weaken further if the latest trade data shows a wider-than-expected deficit for June.
The rand was at 10.6880 per dollar by 08:42 SA time, down 0.26 percent from where it ended the New York session on Wednesday.
Government bonds were also a shade weaker, with yields for the heavily-traded 2026 and 2015 issues each nudging 1 basis point higher to 8.30 percent and 6.705 percent respectively.
The rand fell to a 1-1/2 week low of 10.7190 on Wednesday, after US GDP data beat market forecasts and the Federal Reserve issued a hawkish statement, reducing appetite for high yielding but riskier emerging currencies.
“What these moves have created as far as the rand is concerned is an environment where there could be a lot at stake over the next few trading sessions,” Standard Bank trader Warrick Butler said.
The rand would find resistance at the 10.6200 and 10.5750 levels and support at 10.7170 and 10.7700, he said.
On the domestic front, trade numbers at 14:00 SA time will give the market a steer on the state of the economy, and whether there is scope for the Reserve Bank to increase rates further this year.
“While the median forecast is for a slight improvement of the trade deficit, a significant deviation will be rand negative as it suggests the economy continues to struggle to contain its current account deficit,” RMB analyst Mamello Matikinca said. - Reuters