Rand holds firm against dollar as futures edge up

2010-07-27 07:36

The rand touched a 3-month high against the dollar today and looked set to hold its ground, helped by firmer stocks and speculation of a possible purchase of local group Nedbank by HSBC.

The Johannesburg Stock Exchange’s (JSE) Top-40 September futures contract ticked up just 0.17% ahead of the start of trade on the local bourse at 0700 GMT.

European shares looked set to open flat after reaching a five-week high in the previous session.

At 0642 GMT the rand traded at 7.3460 to the greenback, off just 0.08% from Monday’s close at 7.3400.

The domestic currency briefly flirted with 7.3201/dollar earlier today, the strongest it has been since April 30, Reuters data shows.

A foreign currency dealer based in Johannesburg said: “I think there’s some interim support around these levels of 7.33/34, but overall there’s still very positive equity markets and positive sentiment.

“Combined with rumours of some more foreign direct investment with foreign suitors for Nedbank, the rand looks to be in good shape. I think that resistance will now come in at 7.38/40 and in this move we should target around lower 7.20’s.”

Government bonds were firmer in earlier trade, pulling the yield on the benchmark 2015 note three basis points lower to 7.60% that for the longer-dated 2036 dipped half a basis point to 8.64%.

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