South Africa’s rand was a touch stronger against the dollar early on Tuesday but was not expected to hold on to gains as uncertainty about the outcome of talks on a funding deal for Greece undermined investors’ appetite for risk.
At 0633 GMT the rand was trading 0.31 per cent firmer at 12.2275 to the dollar compared with its closing level on Monday.
(READ MORE: S.Africa’s rand weakens ahead of data-filled week)
“The rand has been excessively hit in the generalised emerging market sell-off and may be able to make some mild gains today, but the overall trend is towards weakness in an event-filled week,” John Cairns of Rand Merchant Bank said in a note.
He added: “Greek concerns will remain in focus. Expect attention and global risk aversion to rise ahead of Friday, even if Greece somehow manages to keep on living beyond each supposed deadline.”
The leaders of Germany, France and Greece’s international creditor institutions agreed late on Monday to work with “real intensity” in the coming days to try to clinch a deal to prevent Athens from defaulting on its debt.
Market participants also awaited Friday’s Fitch rating update on South Africa and U.S. nonfarm payrolls report.
In fixed income, the yield for the 2026 benchmark was flat at 8.265 per cent.