JOHANNESBURG: South African assets were trading firmer early Friday with the rand extending previous gains to a nine-day high as global investor sentiment turned positive after a fresh bail out for Greece was approved.
Government bonds were supported by a dovish central bank statement in the previous session, which hinted at interest rates staying at 5.5 percent to year-end.
The rand traded at an over one week-high of 6.761 to the dollar in the early morning session. It closed at 6.77 on Thursday.
"We are trading firmer this morning as a follow-through on yesterday's risk rally," said Duncan Howes, a currency trader at Absa Capital.
"The notion of a consensus emanating from the EU members has helped risk-to-rally as we've seen it. Where we stand at the moment, we think the rand will take its cue from the broader risk and remain firm," Howes added.
Absa sees the currency strengthening to around 6.72 against the dollar.
Yields on government bonds gave up two basis points each to 7.36 percent on the four year note and 8.455 percent on the 20 year paper
Stocks also look set for a good session as equities take their cue from the risk rally. Stock futures point to a positive open with the Top-40 September futures contract up 0.22 percent before the start of trade at 0700 GMT.
Copyright Reuters, 2011
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