* Rand on track for sharpest fall against dollar among peers
* Bonds track currency weaker, yields up
JOHANNESBURG, Dec 29 – South Africa’s rand recouped
some of its overnight losses against the dollar on Thursday but
could give up further ground in line with a struggling euro,
with thin liquidity as the year closes exaggerating some of the
moves.
By 0652 GMT the local currency was 0.22 percent
firmer on the day at 8.2019 to the dollar compared with its
previous close of 8.22 and within sight of a six-day low of
8.2250 touched in late Wednesday trade.
“It’s really just a stronger dollar across the board, really
driven by lower euro-dollar, and we’re just rebalancing based on
that,” said Garth Klintworth, head of fixed income, commodities
and currencies at Absa Capital.
“Locally it’s very quiet, if anything we’ve seen
constructive flows that are rand-supportive, where corporates
are selling export proceeds, so domestically there’s no
concern.”
The rand is down about 24 percent against the dollar since
the start of this year. Only the Turkish lira has fallen more
this year than the South African unit in a basket of 20 emerging
market currencies monitored by Reuters.
Both the National Treasury and the Reserve Bank have said
the liquid nature of the rand makes it vulnerable to wild swings
in portfolio flows in either direction during periods of global
market volatility.
Government bonds tracked the rand weaker on Thursday and
the yield on the benchmark 2015 bond added half a
basis point to 6.765 percent while that for the 2026 bond
was up 1.5 basis points at 8.535 percent.
(Reporting by Stella Mapenzauswa; Editing by Ed Stoddard)
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