South Africa’s rand traded sideways on Friday as market participants waited for political developments and technical indicators following a volatile week driven by speculation over President Jacob Zuma’s future.
At 06:40 GMT the rand was 0.1% weaker at 12.40 per dollar from a close of 12.39 overnight in New York.
On Tuesday, the rand briefly slipped to a two-week low of 12.55 after the ANC said an early exit for Zuma had not been discussed at a party meeting, although rumours he would be ousted before his term ends in 2019 have persisted.
“Flows have been light and fairly neutral with a small bias this week towards the supply end of the spectrum mainly from international real money accounts chasing the lustre of yield,” Standard Bank’s Warrick Butler said in a note.
The rand drew some interest late in Thursday’s session and into trading in Asia as carry traders continued to see value in the currency, particularly with local interest rates expected to remain elevated for at least the first quarter of the year.
High currency volatility is typically matched by large interest rate differentials, and the rand is often used as the common currency by speculators seeking high, short-term term returns.
A Reuters poll this week showed 17 of the 20 economists polled expected the Reserve Bank will leave interest rates unchanged at 6.75% at its JanUARY 18 meeting.
Bonds were flat with the yield on the government paper due in 2026 at 8.595%.
Stocks were set to open higher at 0700 GMT, with the futures index of benchmark Top-40 up 0.25%.