JOHANNESBURG (Reuters) – The rand held steady against the dollar early on Friday with investors waiting to see if striking South African metal workers would accept a wage deal from employers that would end a 3-week work stoppage.
The rand was also looking offshore for further impetus after breaching the 10.5000/dollar resistance level to hit a 2-month high in the previous session.
At 0628 GMT, the currency was at 10.5200 to the dollar, little-moved from its 10.5295 close in New York on Thursday.
However, dealers are starting to wonder whether the rand could be overbought, especially if the NUMSA metalworkers union does not accept a wage deal to end its industrial action.
“Although the U.S. dollar index is stretching towards last month’s high, the rand held up better against the dollar. However, we remain concerned about the overbought rand reading, and today we are watching the 10.40 and 10.60 levels for direction,” Barclays Africa technical strategist Judy Padayachee said.
The South African Reserve Bank is due to hold its Annual General Meeting at 0800 GMT, which may give further clues about its thinking on the economy and interest rates.
In the bond market, yields also steadied on the benchmark government paper, with the issue due next year trading at 6.65 percent, while the 2026 bond was at 8.15 percent.
The Treasury has offered 800 million rand ($76 million) of 2025, 2038 and 2046 paper for sale at its weekly auction of CPI-linked bonds. Results of the sale due after auction closes at 0900 GMT.
($1 = 10.5222 South African Rand)
