South Africa's rand falls against dollar, bonds weaker

JOHANNESBURG: South Africa's rand was on the back foot once more against the dollar on Thursday after attempting a ral
03 Nov, 2011

Government bonds were also weaker in thin trade, with investors preferring not to take positions until the way ahead for global markets becomes less uncertain.

The rand was down 0.53 percent at 8.0460 to the dollar by 0643 GMT compared with Wednesday's close of 8.0035.

The rand attempted a move back to the mid 7.90's on Wednesday but stalled at 7.95.

It looked set to stay under pressure on Thursday, in line with the euro, which edged lower as investors worried about the ramifications of a possible Greek default after the debt-ridden country called for a referendum on a euro zone bailout.

"What the market is fearing the most is a disorderly default and that is what's looking likely at the moment with the referendum talk coming out of Greece," said Alvin Chawasema, a trader at Renaissance Capital.

"Greece needs money in November and it's clear that they're not going to get that money in November so that whole uncertainty and that picture being painted out there doesn't look great at all for risky assets."

Bonds followed the rand weaker, and yields climbed higher, with that on benchmark 2015 paper adding four basis points to 6.64 percent while that for the 2026 paper gained 4.5 basis points to 8.415 percent.

Traders said uncertainty was keeping most bond investors on the sidelines, with turnover on the Johannesburg exchange on Wednesday of less than 10 billion rand compared with usual daily volumes of 15-20 billion rand.

Copyright Reuters, 2010

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