* Rand may gain if Greece gets loan package
* Bonds slightly firmer, eyes on budget
JOHANNESBURG Feb 20 (Reuters) – South Africa’s rand
firmed against the dollar on Monday, and looked set to post
further gains if Europe’s leaders sign off on another rescue
package for Greece intended to avert an imminent and chaotic
default.
A decision by China to loosen monetary policy also boosted
risk sentiment, with commodity currencies such as the rand
firming.
The rand was trading at 7.6714 against the dollar,
nearly one percent firmer than Friday’s New York close of
7.7425.
“We are still very much in ranges and we would have to break
7.54 to start generating any proper downside momentum but until
then in we’ll stay in the 7.64-7.74 range,” said Jim Bryson,
chief dealer at RMB.
“We’ve come in with dollar/rand a bit oversold this morning
and its unlikely we’ll break 7.64 and we will probably bounce a
bit,” he added. Trading might be skittish due to a U.S. market
holiday.
On domestic front, Finance Minister Pravin Gordhan presents
the 2012 budget on Wednesday, with markets looking to how the
government plans to fund a 300 billion rand infrastructure
programme announced by President Jacob Zuma this month.
Signs of the government taking longer than expected to
narrow the budget deficit are likely to put pressure on the
currency and bonds, with investors set to price in more issuance
at the long end of the curve.
On Monday, government bonds started steady, with the yield
on the 2015 bond unchanged from the previous close at
6.6 percent while the 2026 bond yield ticked up 0.5
basis points to 8.235 percent.
The JSE’s Top-40 March futures contract was up 0.42 percent
suggesting a positive start on the stock market at 0700 GMT.
(Reporting by Phumza Macanda; Editing by Ed Cropley)
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