Johannesburg - The rand stood on a slightly firmer footing against the dollar yesterday, recovering from a near six-and-a-half-month low on exporter demand and as players squared long dollar positions.
A trader at a major local bank said a recovery in key emerging markets such as Brazil had also boosted the rand, which touched R6.7575 a dollar late on Tuesday, its weakest level since November 16.
At 5pm the rand was bid at R6.68 a dollar, about 1c firmer than in New York but 9.5c weaker than its Tuesday close.
"There's been a lot of exporters selling dollars," the dealer said. "Emerging markets are also a bit better off.
"Some offshore banks were trying to buy the rand at high levels. The market is a bit long dollars at the moment."
Joshua Cohen, an analyst at Econometrix Treasury Management, said the rand was unlikely to test this week's lows again any time soon after a slide seen by some as overdone.
The market shrugged off figures showing South Africa's trade deficit remained deep in the red for the year. Although it eased to R2.4 billion in April from R2.9 billion in March, the gap was wider than expected.
Much depends on US payrolls data due tomorrow. Strong employment figures are seen as a sign that the US Federal Reserve will continue raising interest rates, boosting the dollar.
The greenback gained modestly against a basket of currencies as money managers balanced their portfolios while waiting for minutes of the Fed's May policy meeting.
On Tuesday the dollar had made its biggest daily loss since early January after the nomination of Henry Paulson to succeed John Snow as US treasury secretary did little to dispel the notion that Washington favoured a weaker dollar.
In New York trading, the euro was fetching $1.2828, down 0.25 percent on the day.
Government bonds were softer, in line with the rand. The yield on the R153 bond weakened 7 basis points to 7.515 percent, while the R157's yield softened 8 basis points to 7.745 percent.