Rand steadies on euro zone concerns

Graphic: renjith krishnan

Graphic: renjith krishnan

Published May 25, 2012

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South Africa's rand steadied on Friday against the dollar but remained under pressure from a weaker euro and the debt crisis sweeping its major European trading partners.

The rand was slightly firmer at 8.3455 at 08:46 SA time from New York's Thursday close of 8.3625 per dollar.

“It seems as if markets took a breather in a day that saw little new information on the unfolding drama in the Eurozone,” Rand Merchant Bank wrote in a client note.

“We expect uncertainty to remain high until there's clarity over the future of the Eurozone.”

Government bonds opened flat, with the benchmark yield at 6.35 percent for the three-year bond and the 14-year paper slipping half a basis point to 8.32.

Bonds gained on Thursday after the Reserve Bank left rates unchanged. Analysts suggested the bank's statement sounded dovish with it forecasting a lower inflation number.

Treasury is due to auction 500 million rand of the 2018, 800 million rand of the 2031 and 800 million rand of the 2036 nominal inflation-linked bonds at 11:00 SA time.

On the bourse, the JSE's blue-chip Top-40 June futures contract was up 0.06 percent before the 09:00 SA time start of trade, pointing to a positive start. - Reuters

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