S.Africa's rand rebounds, seen firmer vs dollar

Mon Feb 13, 2012 7:08am GMT
 

JOHANNESBURG (Reuters) - South Africa's rand firmed against the dollar on Monday, with further gains seen as calm returned to the market after nervous selling on Friday caused in part by a cryptic announcement from the central bank that spooked traders.

Friday's statement said President Jacob Zuma would announce something of "national importance" with Reserve Bank Governor Gill Marcus and Finance Minister Pravin Gordhan on Saturday, sparking fears of major policy or personnel changes.

However, the revelation turned out to be a new set of bank notes bearing the image of Nelson Mandela, South Africa's first black president and leader of the anti-apartheid movement.

"There was uncertainty on what they would announce over the weekend but it turned out to be something not market-moving, and the rand has reversed all the losses made on Friday," said Lee Naisbitt, dealer at Rand Merchant Bank.

"Today we are going to resume the downtrend. The rand should start off with 7.62-72 for the day. This opens up the downside."

The rand was trading at 7.6650 against the dollar, nearly one percent firmer than Friday's New York close of 7.7395.

Local bonds also rebounded in line with the currency.

The 2015 bond yield fell 3.5 basis points to 6.605 percent and that on the 2026 note shed four basis points to 8.27 percent.

Also supporting markets was news that Greece's parliament had approved an austerity bill that brought the country a step closer to securing much-needed funds.

On the bourse, stocks looked set for a lower start, with the March futures contract of the JSE's blue-chip Top-40 down 1.12 percent before the 0700 GMT start of trade.

The local data calendar is largely bare this week save retail sales figures on Wednesday.

A new five rand coin is displayed by a South African Reserve Bank worker during its launch at the South African Mint July 27, 2004.

Market Update

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UK £ USD =1.3260
Euro USD =1.1141
Rand USD =0.0685