JOHANNESBURG: The rand steadied against the dollar on Wednesday, but looked ready to fall through the 8.20 barrier and out of last week's range as investors waited for retail sales data that could point to slowing economic growth in Africa's largest economy.
The rand was at 8.19/dollar by 0608 GMT from its near-breach of support at 8.1980 in the New York close on Tuesday.
Retail sales growth, which has been one of the few positive economic pieces of data this year, is expected to have slowed to 4.7 percent in June compared to 6.4 percent May. The data is due at 1100 GMT.
If it comes in softer than expected, it may push the rand through 8.20 per dollar, which would open up much weaker levels.
"As oversold dollar positions unwind, we favour a return to 8.55, and potentially higher, later this quarter," said Judy Padayachee, technical strategist at Absa Capital.
The rand had rallied to a 8.07 close last week into what dealers said were overbought levels that set it up for a decline. It has gradually retreated from that level, weakening for the third straight session on Wednesday morning.
Yields on government bonds nudged slightly higher at 5.685 percent on the 2015 note and 7.5 percent on the 2026 issue.
Treasury will announce issuance plans for next week at 0900 GMT.
Market players will also be watching to see if the violence from union rivals at a Lonmin mine, which has killed 10 people so far, spreads to the rest of the mining sector.
This would likely knock investor sentiment towards South Africa and badly hit the already struggling platinum sector, weakening its contribution to economic growth in the third quarter.
Comments
Comments are closed.