* Rand slightly firmer vs dollar but within range
* Govt bonds weak, yields rise for seventh day
JOHANNESBURG Dec 13 (Reuters) – The rand firmed
slightly against the dollar on Tuesday but stayed within a
recent range and was above key levels that would signal further
gains, while government bonds were at two-week lows in thin
conditions, with news from Europe the main driver.
Analysts say bonds are following moves in the rand but will
not buy into its current strength until gains are shown to be
sustainable, with thin volumes adding to pressure on yields.
The rand traded between 8.19 and 8.29 during the
session and was 0.3 percent firmer at 8.2450 at 1540 GMT.
The 8.18/20 level will provide some resistance to any rand
gains and 8.32 offers support, which if broken may open up the
previous 8.46 low and then the currency’s 2011 low of 8.61.
The rand, which serves as a barometer for risk, has been
trading according to moves on the euro/dollar and changes in
risk sentiment and dealers say they are beholden to headlines
out of the euro region for the time being.
Yields on South Africa’s benchmark bonds rose for the
seventh consecutive session, adding 4.5 basis points to 6.89
percent on the 2015 bond and 5 basis points to 8.62
percent on the 2026 issue.
“I think we are tracking the rand more than anything else.
Bond yields are also rising, largely due to no liquidity, and
also weighing on the market was a poor auction,” said Richard
Farber, a bond dealer at WWC Securities in Johannesburg.
Continued…
