Risks seen for rand in data heavy week
Currencies / 10 Dec '12, 11:47am
South Africa's rand is expected to hold steady this week, holding on to recent gains, although any surprises from a slew of year-end data could weigh on the unit.
The rand was at 8.6590 to the dollar at 08:48 SA time on Monday, similar to its close in New York on Friday.
Graphic: renjith krishnan
It rallied on Friday after an unexpected fall in the US jobless rate boosted emerging market currencies and is expected to settle into a range this week.
“It looks like it's going to trade quite well, maybe towards the low 60s in a continuation of last week,” said Jim Bryson, a trader at Rand Merchant Bank. “It's really a search for yield now with the projections in Europe.”
Local data to be released this week include retail sales, employment and manufacturing production figures on Tuesday and inflation on Wednesday. Softer-than-expected numbers could put the rand under renewed selling pressure, analysts at Absa Capital said.
“Such an outcome would serve as a reminder of South Africa's fragile macroeconomic backdrop and may even re-ignite expectations of more monetary accommodation,” the analysts wrote in a research note.
The yields on the 2026 and 2015 bonds inched up one basis point each to 7.38 percent and 5.48 percent respectively. - Reuters