JOHANNESBURG May 29 (Reuters) – South Africa’s rand ticked
up slightly against the dollar on Tuesday although concerns
about the banking sectors of some European countries are
expected to keep a lid on risk appetite and curb gains by
emerging market assets.
The main focus for the day should be on the debt problems in
Europe, but domestic GDP data due out at 0930 GMT will be the
latest gauge on whether Africa’s largest economy needs more
stimulus in the form of interest rate cuts later this year.
At 0628 GMT, the rand traded at 8.3215 against the dollar,
0.31 percent firmer than Monday’s close of 8.3475.
Some analysts say the rand is looking oversold after
weakening 7.8 percent so far this month on fears that if
countries like Greece are forced into a chaotic departure from
the euro zone, South Africa would be rocked by the damage in its
major export market.
“Today I continue to favour the 8.28-8.40 range, cautious
that we are still due a correction in stale short-term long
dollar positions but happy to take advantage of any major move
lower to get long again,” Standard Bank trader Warrick Butler
said in a note.
“Bear in mind that today is also the start of corporate
month-end and demand will pick up from local importers.”
Government bonds weakened slightly in early trade, nudging
the yield on the three year paper 1.5 basis points
higher to 6.38 percent while that for the 14-year issue
added a basis point to 8.34 percent.
Yields could head lower if data from Statistics South Africa
points to lower growth in the first quarter of the year, with
economists polled by Reuters last week seeing a slowdown to 2.4
percent in Q1 from 3.2 percent in Q4 2011..
(Reporting by Stella Mapenzauswa; Editing by Jon Herskovitz)
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