* Rand could break out over 8.20
* Foreign reserves nudge up in June
* Inflation-linked bond auction at 0900 GMT
JOHANNESBURG, July 6 (Reuters) – The rand eased in early
Friday trade and looked set to break through an 8.20 support
level that has held it down in recent sessions while yields on
government debt hit fresh record lows as more foreign money
poured in in search of higher returns.
The rand was at 8.1620 against the dollar at 0648
GMT, 0.21 percent weaker than its New York close of 8.1450.
The unit has been stuck in a 8.20-8.06 band this week and
needs to break through those barriers to move out of its lull.
“We continue to watch these boundaries for direction – 8.05
and 8.20 – and despite the event risk as we await the release of
U.S. non-farm payrolls, our bias is to look for bottoming
signals in dollar/rand,” said Absa technical strategist Judy
Padayachee.
The rand ignored reserves data which showed South Africa’s
international liquidity position had nudged up by $311 million
to $49.218 billion in June due to a higher gold price and a
weaker dollar in the month.
With no other domestic data expected in this session,
dealers will look abroad, especially at the U.S. non-farm
payrolls numbers at 1230 GMT.
Yields on government paper hit fresh records, at 5.90
percent on the 2015 and 7.075 percent on the 2021
issue.
Treasury will look to place 800 million rand of inflation
linked paper in the session. Results are out after the auction
closes at 0900 GMT.
(Reporting by Xola Potelwa; Editing by Ed Cropley)
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