JOHANNESBURG (Reuters) - South Africa's rand fell against the dollar early on Tuesday and was likely to stay under pressure with market players anticipating weak economic growth data later in the session.
The rand gave up 0.8 percent from its previous close to trade at 9.67, not far off a its next support level at 9.70.
The currency has been trading in a narrow band set last week when it last tested four-year lows just shy of 9.70.
Economic growth data for the first quarter of the year is due at 0930 GMT and is expected to show GDP slowed compared to last year.
Market players have priced in negative news, meaning the rand could hold below the 9.70 support level. However, the rand could push through a fresh four-year low if simmering labour tensions escalate.
Labour unions in South Africa's mining sector are in wage negotiations with employers, with outcomes are expected in the next month.
Foreigners have lately dumped local bonds, tracking U.S. Treasuries and out of fears that South Africa's credit rating could be at risk of a downgrade because of the tense labour situation.
Bond yields were higher, with the 2026 benchmark bond yield up 6 basis points to 7.13 percent, a level from April 5.
"Local structural issues have seen a selling trend in the bond market soldier on, which is of some concern going into this morning's auction," Thando Vokwana, a bond dealer for Rand Merchant Bank, said in a note to investors.
Treasury is selling 2.35 billion rand in the 2023, 2026 and 2031 paper at a weekly auction. Results are due after the auction closes at 0900 GMT.
"It seems more than likely that the market will see slightly elevated clearing yields yet again, while primary markets struggle to garner offshore support," Vokwana added.
Offshore accounts sold 1.7 billion rand in local debt last week, a trend that is expected to continue this week.
Source: http://news.yahoo.com/africas-rand-down-nearly-1-pct-bonds-sold-065934280.html
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