* Rand seen range bound in thin trading volumes
* Government bonds flat in early trade
JOHANNESBURG Jan 3 (Reuters) – South Africa’s rand
was slightly firmer against the dollar on the second trading day
of the year on Tuesday and should stay largely rangebound as
market players drift slowly back after the Christmas and New
Year breaks.
Local traders returned to the market on Tuesday after local
exchanges were closed for a post New Year public holiday in
South Africa on Monday.
By 0639 GMT the local currency was up 0.28 percent
on the day at 8.0520 to the dollar compared with Monday’s close
at 8.0750.
“The rand is slightly higher, we did see it testing the lows
of the day, but it’s still thin liquidity at the moment, so it’s
going to be quite difficult,” RMB trader Lee Naisbitt said.
“I think for now we’re still in a range. If we manage to get
through 8.03 we should target a bit lower ( a firmer rand). But
to start off the day we’re looking at 8.03-8.08. It’s gonna be
quite erratic and pretty rangebound this week.”
The rand, a very liquid currency, plunged nearly 22 percent
against the dollar in 2011, one of the steepest falls globally,
taking the brunt of an emerging market asset sell-off as
investors worried about the effects of a debt crisis in the euro
zone.
On Tuesday the rand took its cue from Europe’s common
currency, which edged higher against the dollar and the yen but
looked set to remain under pressure in 2012.
Government debt was flat as the Johannesburg bond exchange
resumed trade for the year, with the heavily traded 2015 issue
unchanged from its Dec. 30 close of 6.73 percent, as
was the longer dated 2026 bond at 8.485 percent.
South African high-yielding bonds held up well despite last
year’s global flight from higher-risk assets, with net foreign
inflows in 2011 reaching about 48 billion rand, according to
data from the local exchange.
(Reporting by Stella Mapenzauswa, editing by Ed Stoddard)
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