* Rand might retrace to 7.77
* Bonds follow rand weakens
JOHANNESBURG Feb 10 (Reuters) – South Africa’s rand
weakened against the dollar on Friday and is likely to remain
under pressure as the Reserve Bank steps in to stem a strong
rally this year by buying foreign exchange.
The rand, which lost more than 20 percent against the dollar
last year, hit a five-month high of 7.52 this week but failed to
break resistance at 7.50.
It was trading at 7.6630 to the dollar at 0653 GMT, one
percent weaker than Thursday’s New York close of 7.5845.
“A retrace back to 7.77 in the short term could be on the
cards after bulls repeatedly failed to breach 7.52 to the
downside,” Absa Capital said in a note.
“Hence, we suspect that exporters will hold out for better
levels to repatriate dollar earnings.”
There was muted reaction to President Jacob Zuma’s pledge in
a State of the Nation address late on Thursday to increase
infrastructure spending in an effort to quicken job creation.
Further details of the investment spending will come out of
the Finance Minister’s Budget on Feb. 22.
Continued…
