Johannesburg - The rand was barely moved from last week's closing levels against the dollar on Monday and should hold its own as commodity currencies continue to offer attractive yields for investors.
At 08:40 the rand traded at R6.8150 against the greenback, a dip of only 0.14% from Friday's close at R6.8055.
The rand shed about 2% against the dollar last week, but is still up nearly 8% since the start of 2010, driven mainly by foreign investors looking for higher yields offered by emerging markets compared with developed countries.
"The factors that drove the rand stronger in 2010 - rising commodities, the outperformance of emerging market economies and low G7 interest rates - remain in place coming into 2011," Rand Merchant Bank said in a note.
At 08:40 the rand traded at R6.8150 against the greenback, a dip of only 0.14% from Friday's close at R6.8055.
The rand shed about 2% against the dollar last week, but is still up nearly 8% since the start of 2010, driven mainly by foreign investors looking for higher yields offered by emerging markets compared with developed countries.
"The factors that drove the rand stronger in 2010 - rising commodities, the outperformance of emerging market economies and low G7 interest rates - remain in place coming into 2011," Rand Merchant Bank said in a note.
"For now, the outlook remains rand positive and our core view is for another year of a strong rand."
Analysts say the strong rand could prompt another domestic interest rate cut, after 650 basis points of reductions between December 2008 and November last year. The Reserve Bank holds its first policy meeting of the year next week.
Government bonds edged higher in early Monday trade with the yield on the benchmark 2015 bond (ZAR157) at 7.25% from 7.24% on Friday, while that on the 2026 note (ZAR186) rose to 8.27% from 8.225%.
The JSE's blue chip March stock futures contract was down 0.56%, pointing to an negative open for the South African bourse at 09:00."
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