JOHANNESBURG, July 16 (Reuters) – The rand was steady
against the dollar in early Monday trade and should hold its own
as the market awaits Thursday’s monetary policy statement, at
which the Reserve Bank is likely to keep interest rates at
30-year lows.
By 0646 GMT the rand traded at 8.2650 versus the
dollar, barely changed from Friday’s close at 8.2625.
Emerging market sentiment remained cautiously buoyant after
data last week showed growth is holding up steadily in China, a
key importer of South African commodities, traders said.
The currency has also been supported by strong flows into
the debt market from foreign accounts looking for yield.
“It is hard to envisage a weaker rand over the next few
sessions and technically this is also the case so we will look
for opportunities to sell into rallies for now, albeit on purely
an intra-day basis,” Standard Bank trader Warrick Butler said.
“There is a minor short-term support trend-line at 8.2300
and a break of that could see us move to last Tuesday’s (highs)
of 8.1600,” he added.
Government bonds steadied after last week’s rally, which
pushed yields to new record lows.
The yield on the three-year paper was flat at its
previous close of 5.81 percent while that for the 14-year issue
ticked up 1.5 basis points to 7.64 percent.
On the local front, the market is looking for direction from
consumer inflation and retail sales data due on Wednesday while
Thursday’s monetary policy statement could give clues on whether
a rate cut is in the offing later this year.
All but two of the 23 economists polled by Reuters on Friday
expected the repo rate to stay unchanged at 5.5 percent for now,
but seven predicted a 50 basis point cut before year-end to give
the struggling economy more stimulus.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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