* Rand pulls back from 3-yr low, respite seen as temporary
* Weekly debt auction results due after 0900 GMT
JOHANNESBURG, June 5 (Reuters) – The rand gained for a
second straight session against the dollar on Tuesday,
strengthening to a four-day high as it pulled back from a
three-year low hit last week.
However, government bonds were slightly weaker as dealers
prepared to take up auction stock at 0900 GMT.
The rand was up 0.3 percent on the dollar to 8.4680
at 0639 GMT, off a 8.4910 close in New York. Dealers say the
dollar’s weak close caused some long dollar positions to unwind
in the previous session and support a rand reprieve.
“The dollar/rand close below 8.50 has triggered the
near-term recovery we have been advocating for the rand,” said
Judy Padayachee, a technical strategist at Absa Capital.
“Dollar/rand posted a reversal pattern yesterday and has
confirmed the divergence. We are targeting the 8.30 level – the
20-day moving average.”
The rand recovery was boosted by local players such as
miners exchanging their dollars around the 8.50 rand level on
Monday. Thin liquidity conditions with the UK market closed for
a holiday also helped.
However, the recovery is viewed as only temporary because
external factors such as fears of weak global growth and an
unconvincing domestic recovery have not changed. Analysts say
the unit may still weaken towards 8.80, its level in April 2009.
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