Rand, state bonds steady after rally

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NewRandMoney

Reuters.

Johannesburg - South Africa's rand held steady against the US dollar early on Monday after a sharp rally at the end of last week took the currency and benchmark bonds to multi-month highs.

The local unit is likely to trade in a sideways direction until Wednesday when the US Federal Reserve releases minutes of its monetary policy meeting (FOMC).

Locally, manufacturing and mining data will be the focus on Thursday.

At 08:52 SA time, the rand was trading at 10.5445, little changed from its close of 10.5500 in New York on Friday.

“If this week's FOMC minutes on Wednesday prove to be dovish then the rand bulls could press home the advantage, or surrender last week's gains if the tone of the minutes proves hawkish,” analysts at Barclays Africa said in a market note.

The rand rallied to January 2 levels on Friday afternoon, after the US jobs data was slightly below market expectations, signalling the Fed would not increase the pace of its tapering programme, which has put pressure on emerging markets recently.

The rand is expected to find some resistance in the 10.47-10.50 area, levels it has previously found tough to break through.

Government bonds were also steady at the 10-week high of 6.735 percent hit on Friday on the short-dated 2015 note, while the 2026 yield held at 8.4 percent. - Reuters


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