* Weak global outlook weighs on sentiment
* Market sees domestic rate cut later this year
JOHANNESBURG, July 9 (Reuters) – South Africa’s rand started
the week under slight pressure alongside other emerging market
currencies on Monday, with recent data pointing to a weak global
economic outlook which should keep risk appetite in check.
The rand was at 8.2675 to the dollar by 0640 GMT,
down 0.42 percent from Friday’s close at 8.2333.
With little local news to move the market, the rand should
take direction mainly from global sentiment, still dour after
last Friday’s disappointing U.S. jobs data, traders said.
Manufacturing data due out on Thursday is likely to underpin
market expectations that the South African Reserve Bank could
cut rates later this year after keeping them at 30-year lows
since late 2010.
The market is however expecting the key repo rate to remain
at 5.5 percent after next week’s policy meeting.
“This week’s local data is likely to remain of secondary
importance, but if manufacturing and mining data heighten local
rate cut expectations then this could hinder the rand from an
interest rate differential perspective,” said Absa Capital.
Government bonds were flat in early trade, with the yields
on the three year 14-year benchmarks
unchanged from Friday’s closing levels of 5.96 percent and 7.865
percent respectively.
(Reporting by Stella Mapenzauswa; Editing by Ed Stoddard)
© Thomson Reuters 2012 All rights reserved
