JOHANNESBURG, June 19 (Reuters) – South Africa’s rand held
steady against the dollar in early Tuesday trade but remained
vulnerable to global investor jitters over the euro zone debt
crisis which pushed the currency to three-year lows at the start
of this month.
The currency appeared unfazed by news that South Africa had
committed $2 billion of its reserves towards a $456 billion IMF
fund to deal with the effects of the euro zone woes on the
global economy.
Government bonds were a touch softer ahead of a weekly
auction likely to add 2.1 billion rand ($251.8 million) of paper
to the secondary market.
Yields on the three-year and 14-year benchmarks
each added one basis point to 6.12 percent and 8.155
percent respectively.
By 0647 GMT the rand was at 8.3005 against the
greenback, little-moved from its previous day close of 8.29.
But sentiment remains wary despite a brief rally on Monday
after a positive outcome to elections in debt-ridden Greece
which allayed some fears of a messy exit from the euro zone, a
key trading partner for South Africa.
The rand, which is highly vulnerable to swings in risk
appetite because of the liquid nature of its market, has
suffered some of the heaviest losses against the dollar among
emerging market currencies this year, hitting a trough of 8.71
on June 1.
“The rand has managed to maintain its recent gains and the
firmer bias could remain intact in the short term,” Standard
Bank strategist Nomvuyo Guma said.
“However, with so much happening on the global front, the
rand remains at the mercy of offshore developments.”
($1 = 8.3383 South African rand)
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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