* Rand weakens with other EM currencies vs dollar
* Bond yields rise with prices depressed by global risk off
trade
JOHANNESBURG, April 23 (Reuters) – South Africa’s rand fell
nearly one percent against the dollar on Monday as emerging
market currencies were sold in favour of the safer dollar in a
risk-averse environment, putting the rand back in line with its
peers after a week of out performance on domestic factors.
The rand and government bonds had gained quickly last week
after an announcement that South African debt was set to be
included in the Citigroup World Government Bond Index.
The news kept the local market cushioned from global
developments, but the effect had diminished on Monday with the
local unit down 0.9 percent against the dollar to 7.8820 in the
session.
It had balked near 7.80 resistance on Friday, ending at
7.8150 in New York.
Analysts said the rand had rallied too quickly and a
breather was expected, which could embed 7.80 as a barrier,
especially as Europe’s troubled nations look to sap any
remaining appetite for risk this week.
Yields on government bonds rose 7.5 basis points to 6.53
percent on the highly liquid 2015 note and 8.5 basis
points to 8.185 percent on the R186 benchmark due in 2026
.
A weekly auction on Tuesday added to the depressed
environment, as dealers sold to make space for auction stock.
“I think the market is weakening a little in anticipation of
the auction. Part of the driver for last week’s rally was
offshore real money buying on the back of the bond index
inclusion, we’ve seen foreigners sit on the sidelines today,”
said Daniel Sabiston adding the weak rand had also driven yields
higher.
Offshore accounts picked up 10.5 billion rand ($1.34
billion) in local debt last week, the second largest weekly
buying in over a year. ($1 = 7.8637 South African rand)
(Reporting by Xola Potelwa; editing by Ron Askew)
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