South Africa’s rand opened a touch firmer against the dollar on Monday on the greenback’s global weakness and exporter activity, traders said.
The rand was trading at R10,275/dollar from a close of R10,30 on Friday, buoyed by exporter purchases.
Traders said the market was also watching the gold price but had shaken off concerns of a contagion effect from Latin America caused by Brazil’s latest blues.
”The dollar is tending weaker (globally) and the rand (has) benefited from that. Traders are keeping an eye on the contagion effect from Brazil but are not overly concerned at this point,” one senior trader said.
”The rand does its own thing,” said another trader, adding that the rand would remain volatile in the near term.
In the past few days, the rand has been unable to draw much support from the dollar’s weakness, signalling an end to a sustained rally which has seen it appreciate 17 percent against the US unit this year.
Last Monday, the rand touched R10,75 against the dollar, its weakest level for two months. Earlier this month the central bank raised its key repo rate by 100 basis points to 12,50% — the third move of that size this year — as part of its continued effort to quash the inflationary impact of the rand’s slide late in 2001.
Traders said bonds were little changed compared to Friday and volumes remained thin.
”The bonds are driven by events in Brazil and the rand,” one bond trader said. ”But it is generally quiet and volumes are thin.”
The yield on the longer-dated R153 bond due 2010 traded at 11,98% from 11,96% on Friday while the yield on the most traded R150, due 2005, was unchanged at 11,84%. – Reuters