* Rand weakens vs dollar but has scope to gain against euro
* Bond yields rise but 2015 issue could be oversold
JOHANNESBURG Jan 9 (Reuters) – The rand followed the
euro to trade weaker against the dollar on Monday with the South
African currency seen consolidating in its recent range ahead of
manufacturing data due later in the week.
The euro zone is South Africa’s biggest trading region and
the rand’s fate is strongly linked to what happens to the single
currency.
The rand was steady in late afternoon trade but was
weaker on the day, trading as low at 8.20 from a 8.1867 close in
New York on Monday.
“The danger is still in the rand being a little bit weaker
(against the dollar) because of the euro,” said Jim Bryson, a
currency trader at Rand Merchant Bank.
Market players were slowly coming back after the holiday and
activity should pick up during the week.
The currency took big falls last week, trading up to 8.25.
Dealers now see the rand consolidating within 8.22 and 8.12,
looking to the euro for direction and awaiting potential
market-moving manufacturing data on Thursday.
“If we’re going to see any strength in the rand it’ll be
reflected in euro/rand rather than dollar/rand. Dollar/rand
looks very range bound and we can strengthen against the euro
because the euro is in a bit of trouble,” Bryson said, adding he
would be watching to see if euro/rand breaks any key levels
which would give direction to the rand.
Government bonds fell along with the currency. The yield on
the 2015 government bond was at 6.895 percent but
analysts said the bond might be oversold and set for a bounce
back from weaker levels.
Activity from foreign accounts started the year poorly, with
offshore investors offloading 379 million rand of South African
debt in the first week of the year.
(Reporting by Xola Potelwa; editing by Anna Willard)
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