JOHANNESBURG: South Africa's rand nudged higher against the dollar in early Wednesday trade but was still stuck in a wide range and looking to break through 8.11/dollar resistance to firmer levels.
The rand was up at 8.1660 to the dollar at 0605 GMT, gaining on a close of 8.1755 on Tuesday. It firmed as far as 8.1190 on Tuesday and a break through 8.11 is on the cards.
"The rand has continued to consolidate last week's gains, on the back of the risk-on global trading environment. With global equity markets on the march and the euro still holding onto last week's strength, it seems unlikely that the rand will retreat in the short term," Absa Capital said in a research note.
The rand had been lethargic this week, not moving out of levels set on Friday as it waits for the next set of developments from Europe that may shift risk sentiment.
Volumes have been thin and the rand has been in range bound since the European Central Bank reassured markets about supporting the euro last week.
"These are real summer markets. We are in ranges and still headline driven, but we've been very light on headlines in the last couple of days," said Jim Bryson, rand trader at Rand Merchant Bank.
The rand needs to break through 8.11 resistance to open up stronger levels at around 8.06/05.
Later in the session the market will look to manufacturing and mining data for clues on the state of the sectors and their contribution to growth this year.
The purchasing managers' index, an indicator of production activity, fell into contraction territory in June, signalling weak output growth in the month.
Government bonds were slightly weaker but yields could track lower if the manufacturing number comes out worse that expected.
In early trade the three-year bond nudged up a basis point to 5.585 percent while the 14-year paper added half a basis point to 7.37 percent.
Economists expect production growth to have dropped to 3.2 percent in June from 4.2 percent in May. The data is due at 1100 GMT.
The Econometer, a key Reuters monthly survey of economists expectations of the economy, is due at 0930 GMT.
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