Friday, December 7, 2012

S.Africa's rand gains, market eyes current account data

JOHANNESBURG (Reuters) - South Africa's rand edged up against the dollar on Wednesday after encouraging euro zone economic data, but local current account figures on Thursday may set the longer-term direction, and a wider than expected deficit could weigh on the rand.

The rand was at 8.7850 to the dollar at 1538 GMT, up 0.2 percent from Tuesday's New York close.

The local unit rose to a session high of 8.7620 earlier in the day after purchasing managers data from the euro zone improved in November, indicating a less severe slump in the region, which is South Africa's second-biggest trading partner.

South Africa's current account data for the third quarter will be released on Thursday at 0800 GMT.

Analysts surveyed by Reuters forecast a deficit of 6.55 percent, wider than the 6.4 percent gap in the second quarter.

Last week, data showing that South Africa's trade deficit had widened more than expected weighed on the rand and the current account figures will be keenly watched.

"Risk is probably tilted towards a disappointing reading," said Sean McCalgan, a market analyst at ETM. "If anything, the data is unlikely to impress. From what we've seen on the recent trade data that's probably going to be confirmed in the current account data as well. That could generate a bit of reversal if it does disappoint."

Government bonds firmed, with the yield on the 2026 bond 9 basis points lower at 7.51 percent and that on the 2015 paper falling one basis point to 5.51 percent.

South Africa's Treasury said it would auction 2.1 billion rand worth of its 2031 and 2048 government bonds on Tuesday.

Source: http://news.yahoo.com/africas-rand-gains-market-eyes-current-account-data-161304473--finance.html

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