JOHANNESBURG: The rand traded softer against the dollar early on Monday, largely taking its cue from a weaker euro as concerns about a bailout deal for Cyprus dampened risk appetite.
The rand edged higher against the single currency itself , pulling back from last Friday's five-week low of 12.0313 to trade at 11.8745 by 0639 GMT.
It was at 9.2280 to the greenback, down 0.52 percent from Friday's close at 9.18.
Breaking with a recent trend, domestic woes - strikes in the mining sector and a wide current account deficit that pushed the local currency to four-year lows over the last couple of weeks - were not a factor in the dollar/rand move.
"It's important to differentiate between the last week or so when the rand touched 9.29. That was based on dollar strength. This move overnight is purely euro weakness," said Jim Bryson, chief dealer at Rand Merchant Bank.
"Certainly the rand will not be on the radar in this type of market and dollar/rand should stay in ranges. That only changes if we were to break the 9.29 area."
The euro, which absorbs about a third of South Africa's exports, fell in Asian trade as news that a bailout plan for Cyprus included taxing depositors sparked fears of a precedent that could trigger bank runs elsewhere.
South African government bonds retreated, pushing yields slightly higher as the market bet that the Reserve Bank would keep domestic rates on hold on Wednesday, balancing concerns about sluggish economic growth with those about rising inflation.
The yield on the 2026 benchmark bond added 2 basis points to 7.425 percent while the shorter-dated 2015 issue was up 2.5 basis points to 5.415 percent.
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