South Africa’s rand steadied against the dollar on Monday, with potential for gains this week as investors could turn towards high-risk assets after Greece secured emergency loans at the weekend.
The Greece deal gave global markets a fillip and local stocks were expected to follow suit.
The rand was trading at 6,7250 to the dollar at 0644GMT, from a New York close of 6,7335. The Johannesburg Stock Exchange September futures contract was 0,83% firmer ahead of the 0700GMT market open.
“With the Greek troubles out of the way, the market has returned to the sell-the-dollar theme. This risks taking the rand into the 6,60s this week,” said Rand Merchant Bank in a note.
An expectationt the European Central Bank might raise rates on Thursday will support the euro, which is the currency of South Africa’s largest trading partner.
But the 6,70 level is strong resistance for the rand and might be tough to break because it is likely to attract strong importer and central bank buying of foreign exchange as it did in early June.
On fixed income, bonds firmed slightly, with the 2015 yield down two basis points to 7,51%, retreating from two week highs.
The 2026 issue fell by one basis point to 8,595%. There is new vehicle sales data in the calendar at 0900GMT.
Sales growth slowed sharply in May on shortage of car parts after an earthquake in Japan in March and the impact of the disaster may still weigh.