* Rand could test three-year low of 8.71 this week
* Power utility Eskom sells inflation-linked bond at 0900
GMT
* Deputy Governor Mminele speaks at 1100 GMT
JOHANNESBURG, July 25 (Reuters) – South Africa’s rand fell
against the dollar in early Wednesday trade, showing a
vulnerability that could see it test a three-year low of 8.71
set in June if the euro region continues to look shaky and fuel
investor risk aversion.
Government bonds tracked the currency lower as foreigners
sold some bonds, driving yields up for the third straight day.
The rand was at 8.5475 to the dollar at 0630 GMT,
0.3 percent weaker than its 8.52 close in New York on Tuesday.
Analysts say the rand is likely to fall towards 8.71, a
three-year low hit in early June. It hit a seven-week low of
8.5525 on Tuesday.
“In the near term, I am looking for a re-test of the June 1
peak at 8.7100 before an eventual break above that in due
course,” said Kamran Sheikh, technical strategist at Informa
Global Markets.
The rand, in line with other emerging market currencies, is
suffering from a bout of risk aversion as Spain’s borrowing
costs soar and the euro’s fourth largest economy looks
increasingly as though it may need a bail-out.
Continued…
