* Investors likely to maintain long-dollar positions
* Reserve Bank rules out intervention to support rand
JOHANNESBURG May 31 (Reuters) – South Africa’s rand hit a
fresh six month low against the dollar early on Thursday before
recouping some of its losses but could resume a slide towards
8.6 as Europe’s debt woes drive investors away from emerging
market assets to perceived safer havens.
The local unit fell to 8.58 to the greenback, its weakest
since late November, before clawing back some ground to 8.5330
by 0650 GMT.
“There is a possibility of some pull-back as exporters step
in this morning but the real core of the matter still remains
this massive uncertainty in Europe and risk-off associated with
that,” said market analyst Quinten Bertenshaw of ETM.
” The core focus for most people is to stay long dollars so I
would suggest that any dips back towards 8.40 will bring back
the buyers with an eventual target of 8.60,” he added.
Governor Gill Marcus again ruled out any central bank
intervention to support the rand late on Wednesday, saying using
foreign exchange reserves to do this would not be good use of
the money.
“If you take that path, you’ve got to have very deep
pockets. We don’t think it is good use of our money. It is very
expensive,” Marcus told a forum.
On Thursday, traders said the market would only pay passing
attention to domestic producer inflation and trade data for
April, which should largely confirm price pressures are fairly
benign, while problems in Europe, a key trading partner for
South Africa, continue to constrain local exports.
Government bonds were weaker, with the yield on the three
year benchmark rising 2.5 basis points to 6.435
percent and that for the 14-year issue adding three
basis points to 8.405 percent.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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