JOHANNESBURG (Reuters) - South Africa’s rand was a touch softer against the dollar on Friday and unlikely to break out of present ranges as concerns about waning economic growth keep rand bulls largely in check.
Government bonds were flat, with yields seen holding up as the market gradually prices out the likelihood of one more rate cut at the central bank’s last policy meeting of the year due to upward risks for the inflation outlook.
The rand was at 8.6493 against the dollar at 0647 GMT, down 0.11 percent from Thursday’s close at 8.64.
“The rand remains entrenched within an 8.60-70 range, consistent with our view that the local unit will oscillate within an 8.50-9.00/USD range for the remainder of the year, mainly due to lingering uncertainty about South Africa-specific risks,” Absa Capital said in a note.
Analysts say a wave of wildcat strikes that have dented mining production and the threat of job losses in the prominent sector should keep investors wary for the rest of this year, curbing appetite for local assets.
“The rand will continue to underperform its emerging market and commodity currency peers over the coming months,” Absa Capital added.
The rand is lying near the bottom in a basket of 20 emerging market currencies monitored by Reuters, having shed more than 7 percent of its value against the greenback since the start of the year. It has only outperformed the Brazilian real, which is down nearly 9 percent.
Government bonds were steady in early Friday trade, with the yield on the 3-year issue trading at Thursday’s close of 5.465 percent while the 14-year paper was at 7.7 percent.