Johannesburg - The rand was largely steady against the
dollar on Friday and should stay within in cautious trading ahead of a weekend
election in debt-ridden Greece that will give a steer on its future in the
eurozone.
The rand was at R8.3853 to the greenback by 06:55 GMT,
barely changed from Thursday’s close at R8.37 in New York.
“We are seeing position-squaring going into the weekend.
Everyone is very much focused on Greece and the eurozone and there’s quite a
lot of uncertainty,” Absa Capital trader Duncan Howes said.
“Dollar/rand will probably trade around the R8.35-45 range
and liquidity is going to be very light. I can’t see much volume going through
the market.”
The rand has come under strain in recent weeks, hitting a
three-year low of R8.71 on June 1 amid fears that the liquidity crunch facing
some eurozone countries could spiral into a more widespread global crisis.
The uncertainty has hit the rand particularly hard among
emerging market currencies because South African markets are highly liquid,
making the country vulnerable to large portfolio inflows and outflows during
times of global volatility.
Government bonds had a fairly sedate start on Friday, with
the yield on the benchmark three-year paper only drifting a basis point lower
to 6.13% from its previous close, while that for the 14-year bond dipped 1.5
basis points to 8.205%.
Demand for local debt is likely to be anchored by the
inclusion from October of 11 government bonds in Citigroup’s reputable World
Government Bond Index, which traders say could potentially bring up to
$9bn of inflows into South Africa.
