* Rand turns positive after last week’s losses vs dollar
* Bonds follow currency firmer, auctions see good demand
JOHANNESBURG Jan 10 (Reuters) – South Africa’s rand
firmed for the first day in five on Tuesday as risk sentiment
improved with positive signals out of the Unites States, which
in turn helped bond prices higher.
The rand broke the 8.10/12 resistance area to trade at
8.0625, making 1.1 percent worth of gains against the dollar on
the day. It closed at 8.15 in New York on Monday.
Analysts see little chance for the rand to break the big 8
rand level without a convincing rally from the euro.
“Euro/dollar has struggled to rally much beyond 1.2800 and
this has limited any further dollar/rand downside, as has
traders buying on dips below 8.1000. I don’t think USD/ZAR is
going to break below 8.0000 anytime soon,” said Christopher
Shiells of Informa Global Markets.
The firmer rand helped to drag bond yields, which trade
inversely to the price, to a week low.
The yield on the three-year bond closed at 6.80
percent from 6.885 percent on Monday and the fourteen year yield
ended at 8.575 percent from 8.67 percent previously.
Treasury held its first fixed income auction for the year
which saw healthy demand even though some players were said to
be holding back.
Continued…
