Johannesburg – The rand rode the wave of an emerging market rally on Tuesday, extending gains to a new three-week high to a US currency weighed down on expectations the Federal Reserve will delay an interest rate hike to September.
By 17:06 GMT the rand had firmed 0.5% to R11.8500 per dollar, having strengthened to as much as R11.8000/$ 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% firmer on the day.
The rand last traded below R11.8000/$ 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 R12.0000/$.
“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 US 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%.
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