South Africa’s rand drifted in a narrow range versus the dollar in the absence of significant drivers on Tuesday, with traders and investors looking to mining and factory output data on Thursday for pointers on the state of the local economy.
The rand has fallen nearly 8 percent against the dollar this year, because investors are concerned about the chronic budget and current account deficits and an electricity crunch facing Africa’s most advanced economy.
The local unit was however on a slightly firmer footing on Tuesday, trading up 0.22 percent at 12.4480/dollar by 1540 GMT compared with Monday’s close in New York.
The rand has pulled back some ground after falling to a 13-1/2 year low of 12.6600 last week on fears of a credit downgrade from Fitch which didn’t materialise.
“A strategy of selling into strength to target levels closer to 12.3765 is favoured, with stops around 12.5420,” Traditional Analytics said in a technical note on the currency pair.
South African government bonds ended firmer after a well-supported weekly auction for primary dealers.The yield for the benchmark paper maturing in 2026 was down 6 basis points at 8.34 percent.