Rand steadies against dollar, bonds firmer

The rand steadied in early trade on Monday, holding on to gains from the previous session as technical consolidation and a break in negative news help the unit to stabilise.

At 0632 GMT, the rand traded at 13.44 per dollar, not far off its close of 13.43 on Friday.

The currency had slumped to a 7-month low last week, hurt by global risk-off sentiment and poor domestic economic data.

“The rand has already weakened a lot and has since recovered, together with other EM currencies. As we have stressed before, local factors are neutral for the local unit. What really matters at this point in time is the value of the US dollar and EM risk sentiment,” Rand Merchant Bank analyst Isaah Mhlanga said in a note.

He added: “The US dollar index failed to push through 95 and is shedding some of last week’s gains. This means that EM currencies and the rand are biased for gains as we start the week.”

In fixed income, the yield for the benchmark government bond due in 2026 was down 6 basis points to 8.81%.