* Bonds firm, foreign inflows persist
* Rand hits near two-month high vs dollar
JOHANNESBURG, July 4 (Reuters) – Yields on South African
bonds hit fresh lows on Wednesday, driven by offshore investors
piling into local debt to chase higher yields.
Investors are adding bonds of Africa’s largest economy to
their portfolios before its inclusion in a prominent world
government bond index in October.
The inflows helped prop up the rand, which was near its
recent high against the dollar on the day. The currency
hit a session high of 8.0648 earlier, putting it in
sight of 8.05 resistance.
If the unit breaks through 8.05 it will open up the 8-rand
figure it last traded at in early May.
However by 1530 GMT the rand had retreated 0.83 percent
from a 8.0725 close in New York on Tuesday as the euro lost some
ground in the late afternoon and dragged the rand along with it.
The euro region is one of South Africa’s biggest trading
partners and the local currency tends to follow the single
currency.
The rand is getting support from foreign money flowing into
the bond market where offshore investors consistently have been
buying bonds and pushing yields to record lows.
Continued…
