* Rand breaks resistance to new 2012 high vs dollar
* Manufacturing data surprises on upside
JOHANNESBURG Jan 12 (Reuters) – The South African
rand rallied to a five-week high against the dollar on Thursday,
breaking through resistance levels as manufacturing data
signalled improved economic growth .
Rising risk appetite globally, underpinned by
solid Spanish and Italian bond auctions, also supported the
rand.
The South African currency gained 0.4 percent
after the better-than-expected manufacturing data, raising hopes
that economic growth in the last quarter of 2011 might have
improved from 1.4 percent quarter-on-quarter growth in the third
quarter.
By 1518 GMT, the rand was at 8.06 to the dollar,
coming back from the session’s high of 8.01, its strongest level
since Dec. 8, after closing at 8.0880 on Wednesday in New York.
“Some positive events for risk out today; we had very good
auctions in the periphery of Europe which were well subscribed,
with the market taking that as very positive for risk, and the
rand rallied quiet hard on the back of that,” said Duncan Howes,
a currency trader at Absa Capital.
The risk-prone rand saw a slight sell-off due to a ratings
warning for France, but investors quickly recovered their
appetite for risk seeing the warning as “nothing new”.
“All in all we had a more positive day for risk,” Howes
said. He sees the rand’s next resistance level at around 7.95,
which is its previous high and its 300-day moving average.
Government bonds benefited from the positive sentiment with
yields ending 7.5 basis points lower on the 2015 bond
and 5.5 basis points down on the 2026 issue.
Power utility Eskom announced it would sell up to
250 million rand ($30.75 million) spread between its 2018 and
2026 bonds next Wednesday in its first auction of the year.
($1 = 8.1304 South African rand)
(Reporting by Xola Potelwa; Editing by Susan Fenton)
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