Rand starts week looking vulnerable

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NewRandMoney Reuters.

Johannesburg - The rand weakened against the dollar on Monday, starting the week on the back foot ahead of events such as a US Federal Reserve meeting and domestic inflation data during a shortened week locally.

The Fed will hold a monetary policy meeting on Wednesday after Statistics South Africa releases February inflation and January retail sales data.

South African markets will be closed for a national holiday on Friday.

Analysts expect that global developments will mainly drive the rand for most of the week, with investors watching political tensions in Ukraine and Russia, while a strike in the platinum mines rumbles on to its eighth week without much impact on day- to-day trading.

“Ahead of the local data, focus will be on the outcome of Sunday's Crimea referendum and potential economic sanctions from the EU/US against Russia,” emerging market analysts at 4Cast said in a note.

The rand fell to 10.6900 to the dollar at 08:30 SA time, down nearly 0.2 percent from a 10.6700 close in New York on Friday.

“With euro/dollar 1.40 in sight, fresh five month lows for the dollar index will leave dollar/rand 10.64/5 the short-term target,” 4Cast added.

The dollar index, a composite of six currency pairs, hit its lowest level since October last week.

Yields on government bonds were up half a basis point on the benchmark bonds on Monday, to 6.9 percent on the 2015 note and 8.535 percent on the 2026 issue. - Reuters

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