S.Africa rand firms on gold, dollar; stock futures flat

JOHANNESBURG (Reuters) - South Africa's rand firmed in early trade on Tuesday, buoyed by a softer dollar and a strong gold price, but local stock futures were flat after two days of losses.

Wall Street rose and Asian markets were steady, while a gold price rising towards last month's record high should help to support the resource-heavy Johannesburg bourse.

The blue chip Top-40 December futures contract was down 0.08 percent at 0640 GMT ahead of the market open at 0700

GMT.

The rand was trading at 7.8945 against the dollar, about 1 percent stronger than its previous close in New York.

The greenback and yen lost ground against higher-yielding currencies after manufacturing and other data showed further evidence of economic recovery, dampening safe-haven demand.

"It might be a day for a recovery in the (rand) currency. The dollar seems to be losing steam and commodities seem to be recovering a bit," Bidvest Bank chief trader Ion de Vleeschauwer said.

"Maybe a bit of a rest day for rand weakness," he said, adding a break of 7.85 was key and could stave off another bout of weakness.

Investors would watch for news from a South African central bank report on the health of the financial sector to be released at 1000 GMT, while new vehicle sales data was due at 0900 GMT.

Government bonds were slightly weaker, with concerns about increasing supply continuing to hang over the market, although a firmer rand may give a boost.

The yield on the 2015 bond was up 2 basis points for the session at 8.505 percent while the 2036 yield added 2.5 basis points to 8.78 percent.