The rand powers up on foreign buying

THE RAND hit its strongest level in nearly a month against the dollar yesterday as investors started returning to emerging markets after weeks of heavy selling.

JSE data showed offshore accounts were net buyers of South African bonds and equities last week, breaking a threeweek selling streak.

At 5pm, the rand was bid at R10.8458 to the dollar, a gain of 5.42c from the same time on Friday. Earlier in the day it hit R10.8255, its strongest level since January 22.

The dollar suffered because of weaker-than-expected US economic data.

Dealers said the rand’s break through resistance at R10.90 in the previous session, and its ability to close stronger than that level, suggested further gains in store this week.

Charts showed the next level of dollar support at R10.7940.

“Should the dollar see further downside momentum, the rand could be due [for] further recuperation until the next wave of external pressure,” said Anisha Arora, an emerging market analyst at 4Cast.

Investors worry that labour unrest, with the platinum sector strike now in its fourth week, could limit rand gains.

Government bonds were mixed yesterday, The yield on the benchmark R186 bond, due in 2026, fell 2 basis points to 8.63 percent. But the yield on the shorter-dated R157 added 1.5 basis points to 7.145 percent.