* Rand at 7 day highs, tracks firmer euro
* Bonds also up on return to emerging markets
JOHANNESBURG Dec 21 (Reuters) – South Africa’s rand
touched a fresh 7-day high against the dollar on Wednesday,
mainly taking its cue from a resurgent euro in the absence of
market-moving domestic news and data as the year winds down.
Government bonds also rose and yields dropped amid renewed
investor appetite for emerging market assets which have seen a
heavy sell-off in recent months on concerns about the debt
crisis in the euro zone.
The rand was trading 0.9 percent firmer at 8.1250
against the greenback by 0644 GMT, compared with Tuesday’s close
of 8.1990. It briefly touched 8.1052 earlier on Wednesday, its
strongest level since Dec. 12
“We’re supported by the euro at the moment and the euro has
gained quite nicely,” RMB trader Lee Naisbitt said, adding the
rand’s next target would be 8.08. A breach of that would open up
another rally to 8.04 and possibly 7.9050, he added.
Because a large chunk of players were out of the market for
their year-end holidays, currency moves tended to be
exaggerated.
“But the theme is stronger for the rand and we should see a
firmer tone going forward. (The euro) is looking a bit more
positive than it has been in some time and I think the rand is
going to take some gains from that,” Naisbitt said.
Government bonds edged higher and yields were inversely
lower, with the four-year bond and the longer-dated
2026 each dropping eight basis points to 6.81 percent
and 8.555 percent respectively.
(Reporting by Stella Mapenzauswa; editing by David Dolan)
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