Johannesburg - South Africa's rand steadied against the US dollar on Friday after a turbulent week, but could come under renewed pressure in the prevailing environment of global risk aversion.

Government bond yields continued their march upwards in a market that is pricing in further domestic monetary tightening this year after a surprise 50 basis point hike in the repo rate on Wednesday.

At 09:00 SA time yields on the 2026 government bond and the paper maturing in 2015 were each quoted 6 basis points higher at 8.905 percent and 7.355 percent respectively, compared to Thursday's closing levels.

The rand was at 11.2150 against the greenback, barely changed from its close at 11.2050 in New York.

Some short-covering could be on the cards for Friday's session after rand bears took the currency to 11.3900 this week, its weakest since October 2008.

The rand has fallen 7 percent versus the greenback since December 31, and is on track for its biggest monthly loss since May last year, when it slid more than 12 percent, according to Thomson Reuters data.

December trade data due at 14:00 SA time would influence the currency, analysts said.

“Given the extent to which the rand has weakened this week and considering there is a chance today's trade balance reading could be encouraging, we would not be surprised if the rand enjoyed some extended short-covering into the weekend,” Absa Capital said in a client note.

“That said, we still prefer to be fading rand rallies over the medium term, as long as emerging market sentiment remains poor. - Reuters