Rand steady, could drift weaker against dollar

JOHANNESBURG (Reuters) – South Africa's rand traded in a narrow range against the dollar early on Friday but could soften into the weekend as political turmoil in Russia and Iraq drains appetite for risky assets.

The local unit was at 10.7765 to the greenback at 0701 GMT, barely changed from its close at 10.7650 on Thursday.

Government debt reversed some of the previous day's gains, with yields for the secondary market benchmark due in 2026 edging up 3.5 basis points to 8.295 percent.

The 2015 bond at the shorter end of the yield curve rose by the same margin to 6.685 percent.

Ongoing political tensions in Russia and Iraq would continue to benefit safe haven currencies such as the dollar at the expense of higher-yield emerging markets that are perceived as carrying more risk, analysts said.

"The rand could continue drifting weaker into the weekend toward the top end of the 2-month trading range of 10.46-10.85/dollar," Barclays Africa predicted in a market note.