JOHANNESBURG: The rand firmed against the dollar in afternoon trade on Friday, with support levels kicking in to reverse some of the local currency's earlier weakness.
The rand was on the recovery from a two-week low of 10.4750 against the dollar. Analysts said the currency looked vulnerable to further weakness while the dollar continues to ride on the Federal Reserve's decision to begin tapering in January.
At 1525 GMT, the rand was 0.4 percent firmer at 10.3685 against the US currency.
"The move above the 10.45 (dollar) resistance has been quickly reversed with prices recently reaching the day low around 10.36-plus," said Neil Irving of 4Cast Limited, adding that the 10.31 range was the next one to watch. However, analysts said while Treasury yields continue to rise after the Fed's decision to begin tapering, countries such as South Africa with large current account deficits will get knocked.
Africa's largest economy is running a shortfall near 7 percent of gross domestic product on its current account.
Yields on government bonds were up 3.5 basis points to 8.195 percent on the benchmark 2026 bond and 6.09 percent on the 2015 note.
Comments
Comments are closed.