Tuesday, 28 July 2015 23:31
JOHANNESBURG: South Africa’s rand gained slightly against the dollar on Tuesday, pulling away from the previous day’s 14-year lows after a sell-off traders and analysts said looked to have been overdone.
The rand hit a session high of 12.5250/dollar and was trading 0.42 percent firmer at 12.5645 by 1619 GMT compared with Monday’s close.
The rand had stumbled to 12.69 on Monday, its weakest since December 2001, taking the brunt of an emerging market sell-off triggered by expectations that US interest rates are set to rise this year.
“The rand looked a tad oversold at those levels, but I would not rule out renewed pressure if the Fed comes out hawkish this week,” a Johannesburg currency trader said. The US Federal Reserve will issue a policy statement on Wednesday which could put more pressure on high-yielding but higher-risk assets like the rand if the US central bank gives any signal on the timing of a rate increase.
Government bonds were mostly steady across the curve, with the yield for the 2026 benchmark ending the day flat at 8.2 percent.
