South Africa’s rand strengthened against the dollar early Thursday and should trade within a 6,98-7,08 range during the session, taking most of its cues from the euro’s movements.
At 0635 GMT the local currency was at 7,0075 to the dollar, up 0,25 % from the previous day’s close at 7,0250.
“The rand is looking strong, we expect it to continue over the short term. I think 6,98 – 7,08 is the range to start with, and we will follow the euro,” said Jim Bryson, a trader at RMB.
“The December market has started so it’s starting to get a bit thinner, but we’ll just wait for the next big announcement from (Europe) and let’s see what happens to the euro.”
The euro, whose movements the rand tends to track, sat tight after surging higher the previous day, as investors waited to see if European Central Bank policy makers meeting later Thursday would take any measures to alleviate worries over euro zone debt.
Investor jitters over the debt issue pushed the rand to a near 3-month low of 7,18/dollar on November 29, but the local unit has since clawed back a lot of ground and remains up about 26% against the greenback since the start of 2009 due to its high yield status.
Government bonds edged higher on Thursday, and inversely the yields on the 2015 and 2026 bonds dipped half a basis point each to 7,355% and 8,355% respectively.
The local bourse looked set to open in positive territory, with the blue chip Top-40 December futures contract ALSIc1 up 0,64% ahead of the 0700 GMT start of trade on the JSE securities exchange.