South Africa's rand largely steady, market awaits ECB

JOHANNESBURG: South Africa's rand traded in a narrow range early on Thursday, with scope to gain against the dollar if the European Central Bank signals the start of an asset purchasing programme to stimulate the euro zone economy.

At 0635 GMT, the local unit traded at 11.5285 per dollar, not far off Wednesday's New York close at 11.5145.

Government bonds edged lower, with the yield for the 2026 benchmark adding 3 basis points to 7.355 percent.

The rand had rallied alongside other emerging market currencies on Wednesday, on speculation that the ECB will announce the purchase of billions of euros every month for the next two years.

"If these reports are confirmed by the ECB statement today, these stimulus measures ... should be conducive to extended risk appetite," Barclays Africa said in a morning note.

"Hence, we think the rand could maintain a firming bias over the coming days if these expectations are correct. But if the outcome disappoints, the rand is likely to quickly surrender its recent gains."