JOHANNESBURG: South Africa's rand rode the wave of an emerging market rally on Tuesday, extending gains to a new three-week high to a U.S. currency weighed down on expectations the Federal Reserve will delay an interest rate hike to September.
By 1506 GMT the rand had firmed 0.5 percent to 11.8500 per dollar, having strengthened to as much as 11.8000 in the session before pulling back as weak Chinese manufacturing data restricted EM currency gains.
Most of the rand's emerging market peers strengthened against greenback, with the Russian rouble and Brazil's real gaining over 1 percent firmer on the day.
The rand last traded below 11.8000 on March 6, with a failure to hold on to this level in coming sessions likely to trigger a reversal all the way back to supports around 12.0000.
"Current levels, from a tech view, are quite stretched now and approaching oversold levels. We are likely to see a pullback from below the 11.80 level," said Ricardo Da Camara, a market analyst with ETM Analytics.
De Camara added the rand would face near-term risks from February U.S. durable goods data due on Wednesday.
"A strong print there will support dollar strength and put the rand under some pressure, De Camara said.
Government bonds were also firmer, with the benchmark paper due in 2026 shedding 4.5 basis points to a three low of 7.645 percent.
Comments
Comments are closed for this article.