Rand steady ahead of data

Published May 19, 2014

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Johannesburg - South Africa's rand steadied against the dollar in afternoon trade on Monday, starting the week with little conviction while investors wait for direction from global markets and key domestic events.

At 17:22 SA time, the rand traded at 10.3530 to the dollar, little changed from a 10.3540 close in New York on Friday.

The rand had neared the key 10.45 level, but recovered after hitting 10.4420.

Dealers said this could be the early stage of a weaker trend, but rand bears would need a sustained break through 10.45.

The rand was still at the mercy of monetary policy direction from the world's biggest economy, analysts at Barclays Africa said in a note.

“For this week all eyes will be on the Fed FOMC minutes, and participants should also continue keeping a close eye on lingering tensions on the local platinum sector as well as in Ukraine.”

The US Federal Reserve will release on Wednesday the minutes of its last policy meeting, at which it reduced its monthly bond purchases to $45 billion from $55 billion.

Locally, investors are worrying about a platinum strike entering its 17th week at Lonmin, Anglo American Platinum and Impala Platinum.

Lonmin earlier reported it had lost a third of its annual production due to the work stoppage over wages.

The strike, the longest and costliest mines strike South Africa has seen, turned violent this month, with four miners killed as some employees tried to report for work.

The rand should also find direction mid-week when South Africa releases key inflation data, ahead of an interest rate decision by the central bank on Thursday.

Yields on government bonds nudged down 2.5 basis points to 6.59 percent on the 2015 note and dropped 4.5 basis points to 8.08 percent on the 2026 issue. - Reuters

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