JOHANNESBURG: South Africa's rand weakened slightly against a robust dollar early on Thursday, looking vulnerable to bets that the European Central Bank would announce easing measures later in the day.
With little on the domestic data calendar until next week's current account numbers, the rand is taking its cues from offshore, dealers said.
A weaker euro, the currency of South Africa's biggest trading partner bloc, drove the rand to trade near the previous session's 2-1/2 week lows as investors sold the single currency ahead of an ECB rates decision.
The rand also came under pressure from dollar buying as U.S. Federal Reserve officials said the U.S. economy was doing better.
Analysts said the difference in the stance of the Fed compared with a more dovish South African central bank was encouraging rand bears.
At 0600 GMT, South Africa's currency traded at 11.2275/dollar, slightly weaker than its close in New York on Wednesday.
"With the euro/dollar under pressure, small hints of further ECB policy easing in the form of QE will be a constructive signal for dollar/rand," said Anisha Arora, emerging market analyst at 4Cast.
The rand pushed to 11.2400/dollar in the previous session and dealers said the door was now open to 11.35 levels that were last tested in early November.
Government bonds tracked the rand and traded near Wednesday's one-week lows, with the yield on the benchmark 2026 bond trading at 7.735 percent.
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