Johannesburg - South Africa's rand weakened slightly against the dollar on Friday after posting sharp gains this week on the back of dovish comments from the US Federal Reserve and hawkish remarks from domestic policy-makers.
The rand bounced from eight-week lows hit last week after President Jacob Zuma appointed Lesetja Kganyago as the new Reserve Bank governor.
Kganyago stressed his commitment to the bank's mandate of stabilising prices.
Rand bulls were cheered by dovish comments from the Fed later in the week that suggested it would not hike interest rates sooner than expected.
Manufacturing output data on Thursday also gave hope the local economy is starting to shrug off the effects of work stoppages in its key sectors.
With little on the domestic or global calendar on Friday, the rand traded within Thursday's levels, at 11.0725/dollar, compared with a 11.0560 close.
It was coming off three-week highs of 10.9630 on Thursday.
“Although the recent recovery in the rand was more aggressive than our 11.10 target, we believe that the larger trend remains rand-bearish,” said Judy Padayachee, technical strategist for Barclays Africa.
The local unit is dogged by a large funding requirement on its current account and worries that a larger-than-anticipated deficit will be announced at an interim budget later this month.
“We recommend selling the rand on a dip to 11.05 today to target the 11.39-11.50 area later this quarter,” Padayachee said, adding that risks were that the pair trades sideways near 11.00 over the next day or two.
Bonds tracked the unsure moves on the rand, with the yield on the benchmark 2026 issue nudging up 1 basis point to 8.105 percent. - Reuters