Thursday, 03 January 2013 12:21
JOHANNESBURG: South Africa's rand softened against the dollar on Thursday in thin post-holiday trade, underperforming many emerging market currencies.
The rand was at 8.5168 to the dollar at 0651 GMT, 0.3 percent weaker than Wednesday's New York close, making it one of the worst performers in a basket of 20 emerging market currencies monitored by Reuters.
It had reached a 3-month high of 8.42 to the dollar early on Wednesday, lifted by US lawmakers reaching a deal to avoid a "fiscal cliff" of tax increases and spending cuts that threatened the world's biggest economy.
The rand erased most of those gains later in the session.
Trading was expected to pick up next week when most market participants return from their holidays, giving the rand some direction.
"There's still a holiday mentality out there and liquidity has been very thin. The rand has been trading erratically," said one trader.
"We will only start seeing proper trades coming back into the market next week when market participants are back again."
The yield on the 2026 government bond was at 7.25 percent while the 2015 issue was yielding 5.33 percent.
Copyright Reuters, 2013