South Africa’s rand nudged firmer in early trade on Wednesday but worries about a global recession are likely to keep the currency under pressure, while stock futures rose, buoyed by a higher platinum price.

Asian shares fell despite a late rally on Wall Street as risk averse investors continued to fret about growth and corporate profits.

U.S. automakers gave a dire warning to lawmakers about the outlook for the industry as they asked for a $25 billion bailout.

The rand was trading at 10.25 against the dollar at 0638 GMT, 0.15 percent firmer than its previous close in New York, after keeping to a relatively tight 10.20 to 10.30 range for the session so far.

“We remain in ranges, extremely volatile within ranges,” Rand Merchant Bank trader Jim Bryson said, adding that data from the U.S. would be watched for direction on the day.

More volatility on global stock markets would probably keep the rand on the backfoot.

“If we can see some stability return to the markets we could see the rand strengthen,” he said.

U.S. consumer inflation and housing data were due for release at 1330 GMT.

Higher metals prices could boost resource counters on the Johannesburg bourse. Gold edged up while platinum gained 2 percent after Lonmin closed a mine in South Africa, the world’s top producer.

The blue chip Top-40 December futures contract was last 0.6 percent higher, pointing to a positive start on the bourse at 0700 GMT.

Government bonds were largely flat, but short-dated paper gained on increasing speculation that the central bank may bring next year’s expected rate cut forward due to sharply falling fuel costs and worries about growth.

The yield on the benchmark 2015 bond rose 0.5 basis points to 8.67 percent compared to Tuesday’s close, while the 2036 yield was up the same margin at 8.03 percent.

The yield on the two-year bond fell 5 basis points to 8.94 percent.

Source: http://www.afxnews.com

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