JOHANNESBURG, June 15 (Reuters) – South Africa’s rand was
largely steady against the dollar on Friday and should stay
within in cautious trading ahead of a weekend election in
debt-ridden Greece that will give a steer on its future in the
euro zone.
The rand was at 8.3853 to the greenback by 0655
GMT, barely changed from Thursday’s close at 8.37 in New York.
“We are seeing position-squaring going into the weekend.
Everyone is very much focused on Greece and the euro zone and
there’s quite a lot of uncertainty,” Absa Capital trader Duncan
Howes said.
“Dollar/rand will probably trade around the 8.35-45 range
and liquidity is going to be very light. I can’t see much volume
going through the market.”
The rand has come under strain in recent weeks, hitting a
three-year low of 8.71 on June 1 amid fears that the liquidity
crunch facing some euro zone countries could spiral into a more
widespread global crisis.
The uncertainty has hit the rand particularly hard among
emerging market currencies, because South African markets are
highly liquid, making the country vulnerable to large portfolio
inflows and outflows during times of global volatility.
Government bonds had a fairly sedate start on Friday, with
the yield on the benchmark three-year paper only
drifting a basis point lower to 6.13 percent from its previous
close, while that for the 14-year bond dipped 1.5
basis points to 8.205 percent.
Demand for local debt is likely to be anchored by the
inclusion from October of l1 government bonds in Citigroup’s
reputable World Government Bond Index (WGBI), which traders say
could potentially bring up to $9 billion of inflows into South
Africa.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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