The rand was firmer in early trade on Thursday, supported by the short-term flows ahead of the end of the financial quarter, but traders said the underlying sentiment remained bearish. The rand was at R10.0583/$ at 08:52, 0.6% stronger than its New York close of R10.12 overnight. The highlights of the day for traders will be the May producer price inflation data and the results of the inflation expectation survey from the Bureau for Economic Research. The rand, which is slightly stronger so far this month, has been resilient in the past few days after slumping to a four-year low in early June, but traders have said the recovery lacked solid fundamentals. With the end of the financial quarter looming, local companies with operations overseas are continuing to support the rand as they switch their dollar-denominated earnings to the local currency. "Whilst short-term corporate or fund flows can certainly cause a break from recently established trends, one should not lose sight of the factors that drove the rand to weaker levels to begin with and the fact that these factors have not dissipated," Tradition Analytics said in a note. Government bonds also strengthened. The yield, which moves inversely to the price, on the benchmark bond due in 2026 fell 4 basis points at 8.105%, while the paper due in 2015 was down 8 basis points at 6.230%.
Posted on: Thu, 27 Jun 2013 08:44:35 +0000
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