S.African rand steadies against dollar, bonds weaker

JOHANNESBURG (Reuters) - South Africa's rand was largely flat against the dollar in early Monday trade but government bonds weakened, with investors opting for U.S. Treasuries as data pointed to a better outlook for the world's largest economy.

By 0712 GMT the local currency was at 7.5745 to the greenback, barely changed from Friday's closing level of 7.5735.

In the fixed income market, the yield on the benchmark 2015 bond added one basis point to 6.68 percent and that for the 14-year paper was up 1.5 basis points at 8.315 percent.

Traders said local bonds were moving in direct contrast with U.S. Treasuries which ticked up, partly boossted by weak trade data from China.

"There's nothing on the local front to drive our market either way, we're taking our direction from overseas," a trader in Johannesburg said, adding the outlook on domestic rates was unchanged, with the Reserve Bank seen maintaining its "on-hold" stance on rates this year.

The rand could rally this week as a more favourable outlook for the U.S. -- after better-than-expected jobs data on Friday -- lifts risk appetite global.

"We expect the rand to enjoy a firmer bias this week and still believe that it is headed higher over the medium term, especially now that sovereign debt concerns in Europe seem to have been put on the back burner and some respite in oil price rises," Absa Capital said in a note.

Source: http://news.yahoo.com/african-rand-steadies-against-dollar-bonds-weaker-072947584.html

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