* Rand firms on hopes of ECB action
* Local currency looking to break 8.11/usd level
* Bonds weaken on profit taking
JOHANNESBURG, Aug 7 (Reuters) – South Africa’s rand firmed
against the dollar on Tuesday, following an uptick in the euro
for the third straight session on convictions that the European
Central Bank will act to tackle the euro zone debt crisis.
At 1550 GMT, the rand was almost half a percent stronger at
8.1302 against the dollar from Monday night’s New York close of
8.170.
Expectations the ECB could step in next month to reduce
crippling Spanish and Italian borrowing costs have sparked a
global rally in risky assets since Friday.
“The correlation between the U.S. dollar to the rand and the
euro to the dollar has been quite evident,” said Anisha Arora,
emerging market analyst at 4CAST.
“Whether the dollar-rand can break the strong 8.11 support
depends on external drivers.”
Government bond yields jumped in late afternoon trade on
Tuesday as investors pocketed profits two days ahead of a
national holiday.
Continued…
