* Dollar/rand could breach support at 7.64
* Bonds steady, inflation a concern
JOHANNESBURG Feb 24 (Reuters) – South Africa’s rand
steadied against the dollar on Friday, with potential gains seen
in the session against a broadly weaker greenback.
Government bonds also held firm after two days of sharp
losses prompted by market scepticism about the government’s
ability to meet narrower-than-expected deficit targets laid out
in this week’s budget.
Fears of inflation as international crude prices climb above
$124 a barrel are also expected to keep bonds under pressure.
The rand was trading at 7.6550 to the dollar at
0650 GMT, not far from Thursday’s New York close of 7.66.
“Sentiment appears to have turned in favour of risk again
and, after lacking direction for most of the week, the euro
rallied strongly yesterday, taking the rand along with it,”
Standard Bank said in a note.
“The rand is still firmer this morning and within sight of
the 7.64 support level. With Asian markets in the black and
commodity prices firming, the global backdrop is supportive of
further rand strength.”
The rand has tried several times in the past two weeks to
break 7.64, a breach of which would open up this year’s high of
7.52.
Continued…
