JOHANNESBURG (Reuters) - South Africa's rand softened against the dollar on Wednesday ahead of Finance Minister Pravin Gordhan's budget speech, which is likely to outline plans for cutting the government's spending deficit amid anaemic economic growth.
The rand was at 8.8428 against the dollar at 0643 GMT, 0.28 percent weaker than New York's Tuesday close at 8.82.
"Clearly the gap between revenues and expenditures needs to be closed, and today's budget will be about how quickly that might be done and by which means," Barclays Capital said in a note.
Rising borrowing costs for Italy due to a political stalemate following its recent election also weighed on the euro, putting pressure on the rand.
Domestic GDP statistics released on Tuesday showed surprisingly strong economic growth of 2.1 percent for the fourth quarter of 2012 from 1.2 percent in the third quarter, due to a boost from the manufacturing and farm sectors.
Gordhan is due to present his budget to parliament at 1200 GMT.
The yield on the three-year bond lost 1.5 basis points to 5.235 percent and that on the longer-dated paper due in 2026 edged up half a basis point to 7.245 percent.
Source: http://news.yahoo.com/africas-rand-softens-ahead-budget-074647322--finance.html
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