* Exporter interest to limit rand losses
* Bonds weaker but off session lows
* Retail sales data due Wed seen showing slower growth
JOHANNESBURG, Feb 14 (Reuters) – South African
government bonds and the rand weakened on Tuesday as rising
global risk appetite dented demand for riskier emerging market
assets, but bonds later recovered some losses after a strong
debt auction.
The rand was last trading at 7.7550 to the dollar,
one percent weaker than Monday’s New York close of 7.6785. It
hit a session low of 7.7617.
“There’s some good demand for dollars towards 7.70 with
daily resistance in the 7.75/78 area,” said a local dealer,
adding that while the rand could fall to 7.80, those levels
would attract exporter dollar sales and cap sharper losses on
the rand.
In the absence of market moving data locally, the rand took
direction from abroad, with news that Moody’s could cut the
credit ratings of France and Austria, after it downgraded six
other European nations, weighing on sentiment.
Euro zone finance ministers are expected to approve a new
bailout deal for Greece on Wednesday but Moody’s news was a
reminder that a Greek resolution would not be the end of the
region’s problems and this would likely leave the rand
vulnerable, said Standard Bank in a note.
On fixed income, the yield on the 2015 bond rose
3.5 basis points to 6.61 percent and that on the 2026 note
rose four basis points to 8.285 percent.
Bonds are likely to stay in familiar ranges ahead of the
Finance Minister Pravin Gordhan’s Budget next Wednesday.
On Wednesday, eyes will be on local retail sales data out at
1100 GMT. The market is expecting December retail sales growth
to slow to 6.5 percent year-on-year and a stronger print could
be supportive of the rand currency.
(Reporting by Phumza Macanda)
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