The rand was softer in early trade on Wednesday on continuing euro woes caused by the crisis in the Spanish banking sector.
At 10:02 the rand was bid at R8.3674 to the dollar from Tuesdays close of 8.3086. It was bid at R10.4225 to the euro from Tuesdays close of R10.3710 and at R13.0304 against sterling from R12.9874 at Tuesdays close.
The Euro was bid at US$1.2457 from Tuesdays close of $1.2477.
The local market was not moved by local data released this morning by SARB.
Credit extension to the private sector (PSCE) grew by 7.33 percent year on year (y/y) in April from 9.16 percent in March SARB said.
The rate of growth of SA's broad M3 money supply measure rose by 6.16 percent y/y in April from 6.65 percent y/y in March.
Absa Capital in their morning report said the rand enjoyed some extended short covering yesterday on the back of a better-than-expected local GDP print but the local unit is on the back foot again this morning.
Intensifying concerns surrounding the Spanish banking sector combined with some disappointing US consumer confidence data and growing reports out of China that additional stimulus measures are unlikely have collectively dampened global sentiment and in turn put paid to the extended rand strength said Absa.
The rand is taking its cue from the euro and ignored the local data said a local trader.
Dow Jones Newswires reported the euro fell to another multi-year low against the dollar on Wednesday in Asia with investors expecting the ongoing regional debt problem to send the currency even lower later in the global day.
The common currency fell to $1.2457 on the EBS trading platform its lowest level since July 2010 due to worries over Spain. A Wall Street Journal report said the European Central Bank would oppose any attempt to fund Spain's effective nationalisation of Bankia SA via its lending facilities citing people familiar with the matter.
Bonds unmoved by PSCE data
South African bonds were unmoved by the release of money supply and credit extension to the private sector (PSCE) data at 08:00 in morning trade on Wednesday.
PSCE grew by 7.33 percent year on year (y/y) in April from 9.16 percent y/y in March the South African Reserve Bank (SARB) said on Wednesday.
The rate of growth of South Africa's broad M3 money supply measure rose by 6.16 percent y/y in April from 6.65 percent y/y in March.
The rate of growth in PSCE was expected to have registered 9.25 percent y/y according to a survey by I-Net Bridge and M3 was expected to have increased at 7.45 percent y/y.
Total loans and advances which is PSCE excluding investments and bills discounted recorded 7.64 percent y/y growth in April from 9.16 percent y/y growth in March.
A lower than expected rise in credit extension should have been bond positive but instead it had no effect on the bond market. For the moment we are just tracking the rand a local trader said.
At 09:01 the benchmark R157 bond was trading at 6.390 percent from Tuesdays close of 6.380 percent and Mondays close of 6.355 percent. The R207 was bid at 7.615 percent and offered at 7.585 percent from a previous close of 7.605 percent and the R186 was trading at 8.340 percent from its close of 8.330 percent.