* Rand firms ahead of Bernanke testimony
* Currency seen trading in 8.12-8.05 range
JOHANNESBURG, July 17 (Reuters) – South Africa’s rand firmed
against the dollar on Tuesday amid hopes the U.S. Federal
Reserve will provide more monetary stimulus to the world’s
biggest economy after a poor retail sales report.
The rand was 0.45 percent firmer against the greenback at
0637 GMT, from Monday’s New York close of 8.220, with attention
focused on U.S. Federal Reserve Chairman Ben Bernanke’s
testimony to Congress on Tuesday and Wednesday.
“The rand has moved marginally stronger this morning,” said
Brigid Taylor, head of institutional sales at Nedbank. “It is
largely driven by a lot of speculation that Bernanke’s report
today will indicate more quantitative easing.”
Government bonds gained, with the yield on the three-year
bond down a basis point to a record low of 5.730
percent and that on the longer dated 14-year paper
down by the same margin to 7.535 percent.
Locally, the South African Reserve Bank kicks off its
three-day monetary policy committee meeting on Tuesday and
Treasury will auction 2.1 billion rand of its 2023,
2036 and 2048 government bonds at 0900 GMT.
According to 21 of 23 economists polled by Reuters, the
central bank will hold its repo rate at a three-decade low of
5.5 percent. The two outlying analysts predicted a 50 basis
point cut to prop up growth in Africa’s biggest economy.
South Africa’s government bonds have received massive
support from foreign investors this year, pushing yields to
record lows and boosting the local currency.
“We have seen our bond market rallying quite hard over he
last week,” Taylor said. That has also continued to support the
rand levels that we currently seeing.”
(Reporting by Vuyani Ndaba; Editing by Ed Cropley)
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