Rand facing further weakness
Johannesburg - South Africa's rand could struggle to regain its strength in the days ahead as the country's weak fundamentals offset an anticipated end-of-year boost to the currency.
The rand was at 8.900 to the dollar at 0648 GMT on Monday, barely changed from Friday's New York close.
The currency looked set to trade in a range of between 8.75 and 8.95 this week but there was potential for further weakness if the 8.95/8.96 level is breached, one trader said.
“We are looking for more short-term weakness,” he said.
“The fundamental backdrop is still pretty weak and that's reflected in the numbers we saw last week.”
After hitting a two-week high last Thursday, the rand was dragged lower the following day when data showed South Africa's trade deficit had widened more than expected in October.
The rand often strengthens towards year-end due to exporter demand for the currency but the poor backdrop and risks associated with the ruling African National Congress' elective conference this month are likely to dampen sentiment, the trader added.
Government bonds were weaker with the yield on the 2026 paper up 6 basis points at 7.62 percent and that on the 2015 bond 6.5 basis points higher at 5.53 percent. -Reuters