* Year-end FX repatriation boosts rand
* Traders see resistance at 8.00/dollar
* Bonds also rally, foreign demand strong
JOHANNESBURG, July 3 (Reuters) – South Africa’s rand rallied
as much as 1.1 percent against the dollar on Tuesday to its
strongest level in 7-1/2 weeks, boosted by increased demand
from local companies repatriating their foreign currency to meet
corporate year-end needs.
Government bonds also strengthened, pulling yields to
multi-month lows as demand from foreigners rose, particularly at
the higher end of the curve.
The rand strengthened to 8.0619 earlier in the
session and was at 8.0730 by 1553 GMT, up 1.01 percent from
Monday’s close of 8.1550.
“The rand has improved a lot in the last 2-1/2 days and a
lot of it has to do with the fact that Friday was year-end for a
lot of companies in South Africa so there’s been a lot of
repatriation of foreign currency accounts and balances,” said
Ion de Vleeschauwer, chief dealer at Bidvest Bank.
The local unit should however meet resistance towards
8.00/dollar, with importers keen to buy dollars at current
levels, he added.
The rand, which slumped to a three year low of 8.71 last
month as investors fretted over euro zone debt problems, has
gained more than 4 percent over the past week on optimism that
leaders in the bloc are making headway in resolving the crunch.
Continued…
