South Africa’s rand firmed against the dollar on Tuesday after a well-received bond auction and was expected to trade in a narrow range until investors know who will be US president, Reuters reported on Tuesday.
The rand was at 8.6599 to the dollar at 1554 GMT, up 0.8 per cent from Monday’s New York close as a cautious market awaits the result of a close race between President Barack Obama and Republican challenger Mitt Romney.
South Africa’s Treasury sold a total of 2.1bn rand of its 2031, 2036 and 2048 government bonds on Tuesday.
Bid-to-cover ratios ranging from 2.1 to 3.8 and a stronger currency shored up government bonds, with the yield on the benchmark 2026 bond five basis points lower at 7.645 per cent and that on the 2015 paper down 0.5 basis points at 5.475 per cent.
“Generally, bond yields at current levels are offering reasonable value and I would expect them to trend downwards,” said Jonathan Myerson, head of fixed income at Cadiz Asset Management.
The rand has traded in a range of between 8.65 and 8.80 since the start of the week.
“The main thing is the outcome of the US election,” said Paul Chakaduka, a trader at Global Trader. “Everything else in between could become almost irrelevant.”