The rand weakened slightly against the dollar on Friday but was off a five-year low hit in the previous session and dealers said it would take cue from global developments including Zimbabwe.
At 6.41am GMT, the rand was trading at 8,15 to the dollar, about 0,25% softer than its last New York close of 8,1295. The rand hit a five-year low of 8,3332 in the previous session before rebounding overnight.
Zimbabwe’s President Robert Mugabe and opposition leader Morgan Tsvangirai agreed to share power late on Thursday in a deal to end Zimbabwe’s political crisis.
”There is some noise about Zimbabwe and I imagine that will probably be positive for the rand,” said a local trader, adding he was happy to go long on the rand.
Other traders said movements of the euro were the main driver of the rand overnight.
”Rand has retraced … and it is mainly generated by euro trading above 1,40 again,” said Brigid Taylor, dealer at RMB.
”We are expecting it to continue on its weakening bias. Right now the range is 8,12 to 8,22/dollar with a bias up to 8,34 and 8,46.”
Global stocks trended higher and the local bourse looked set to follow suit. The Top-40 September futures contract was up 1,65% ahead of market opening.
Government bonds were firmer, with yields on the 2015 bond down seven basis points to 9,15% and that on the 2036 bond falling seven basis points to 8,47%. – Reuters