Rand steadies as investors brace for strikesComment on this story
Johannesburg - The rand was steady against the dollar early on Tuesday, trading in a recent range while market players waited for key inflation data and after a US public holiday.
The rand has been moving away from five-year lows in recent sessions after heavy selling.
The absence of US market players also depressed trading activity, allowing the currency some breathing space.
At 08:47 SA time, the rand was at 10.8500, not far off a 10.8395 close in New York on Monday.
It is expected to stay around current levels for the next few sessions, and needs to break through some resistance levels to open up a deeper pull-back from the low hit last week.
“Dollar/rand will need to secure a break below 10.80 to open the door for a stronger retreat lower towards 10.70. Any such retreat is expected to be weak in context of the long-standing upside trend,” said Tradition Analytics in a note to clients.
The rand has failed to break through levels around 10.82-10.81 in the past two sessions.
Weak economic fundamentals, such as a gaping current account deficit, and concerns around strikes in the mining sector are expected to keep it under pressure for some months to come.
Members of the Association of Mineworkers and Construction Union served platinum and gold mines with 48-hour strike notices on Monday.
The rand shrugged off the news with analysts saying the mines had expected to call the strike. However, it could see some selling once the strikes start on Thursday.
Yields on government bonds were steady as investors braced for higher price pressures when December inflation data is released on Wednesday.
The weak rand and soaring maize prices are combining to increase expectations of an interest rate hike this year.
The 2026 benchmark yield nudged up half a basis point to 8.38 percent.
Government will auction 2.35 billion rand ($217 million) worth of long-dated debt at 11:00 SA time, with dealers expecting strong bidding action as the long end of the curve has been supported in the past few sessions. - Reuters