* Rand down over 1 pct , dealers cover dollar short
positions
* Bonds weighed by weak currency, undercovered auction
JOHANNESBURG May 4 (Reuters) – The rand lost more than 1
percent on Friday as investors covered short dollar positions on
rising risk aversion and South African government bonds fell as
an undersubscribed inflation-linked bond sale weighed on the
market.
The rand hit the week’s low in late trade, with dealers
saying traders who had been short were buying back the dollar
after a disappointing U.S. jobs report and data pointing to a
deeper euro zone recession depressed demand for riskier emerging
market assets.
Rand buying this week had driven the currency to one-month
highs.
By 1503 GMT, the rand was at 7.8161, down 1.04 percent
against the dollar.
“There was quite a lot of rand buying this week and as such
the market is short covering, especially since it started to
break up toward 7.80,” said Brigid Taylor, a trader at Nedbank.
A weekly auction of inflation-linked bonds was well
undersubscribed earlier in the session, surprising the market
and the first time since January that the Treasury had failed to
sell its planned amount of paper.
Only 390 million rand ($50.50 million) was taken up by
investors, out of 800 million rand on offer.
Continued…
