* Rand could test 7.62 to dollar
* Bonds gain, retail sales out at 1100 GMT
JOHANNESBURG Feb 15 (Reuters) – South African
government bonds and the rand firmed on Wednesday after China’s
central bank said it would continue buying euro zone debt,
encouraging investors to take on risky emerging market assets.
The rand, which is highly sensitive to euro zone
sentiment, was at 7.6850 to the dollar in early trade, 0.49
percent firmer than Tuesday’s New York close of 7.7225. It may
test the lower 7.60’s during the session, traders said.
“The rand gained support from a stronger euro overnight and
stronger equity markets,” said David Gracey, a trader at
Investec Securities.
“Basically that support came from comments by China that
they stand ready to support Europe, so there is a little bit of
risk-on. We see a range of 7.62-7.75,” he added.
China will continue to invest in euro zone government debt,
its central bank governor said, calling on Europeans to produce
more attractive investment products.
Tradition Analytics said the rand was resilient, despite
some weakness over the last week.
“The fact that it has failed to crack above levels of 7.7800
yet again suggests that the notion of a weaker rand is not
gaining traction with all in the market.
Continued…
