Johannesburg - South Africa's rand turned softer against the dollar on Monday after central bank data showed only a slight improvement in net foreign exchange reserves during August.
The blue-chip Top-40 futures index was up 0.7 percent suggesting the local bourse would open at least 316 points higher at 07h00 GMT.
Government bonds came under early pressure at the start of trade, with the yield for paper due in 2026 climbing 7 basis points to 8.635 percent.
By 06h52 GMT the rand was down 0.5 percent at 13.9450 against the dollar compared with its Friday close.
The local unit turned south after South African Reserve Bank data showed net gold and foreign exchange reserves ticked up only a bit to $41.244 billion in August from $41.007 billion in July.
The central bank has long admitted it does not have enough reserves to try and defend the rand, which has shed more than 12 percent this year against the dollar as investors expecting U.S. interest rates to rise have dumped risky emerging markets.
On Saturday, Governor Lesetja Kganyago said the sharp fall in the currency “is not necessarily a bad thing” and that it need not be a worry, to the to the extent that it was part of a global foreign exchange rebalancing.
The rand was likely to remain vulnerable to global news headlines on Monday, despite the Labour Day public holiday in the United States which would ordinarily take some pressure off markets, Standard Bank trader Warrick Butler said.
“Looking at the charts, things don't look ready to turn around just yet. The weekly close above 13.50 last week means that more pain in likely in the rand before things get better,” Butler said.
REUTERS