* Rand goes back to weaker tones vs dlr but long-term looks
positive
* Bonds give up previous gains, following rand
JOHANNESBURG Jan 11 (Reuters) – The rand weakened
against the dollar on Wednesday, trading at its lowest for the
session when markets reacted to a warning about the fate of the
euro, which saw investors sell risky assets such as the rand
before rallying a touch.
The local currency was set to weaker from the open, having
closed above key resistance at 8.1025 in New York trade on
Tuesday.
Negative risk sentiment from the euro zone crisis sent the
rand to 8.1670 against the dollar on Wednesday, losses
worth 0.8 percent on the previous close.
The rand is a heavily traded emerging market currency,
mostly because of how liquid it is, serving as a barometer for
investor risk sentiment. It opened the year on a firm footing,
looking to break through 8 rand resistance, but was dragged
weaker by euro woes all the way to 8.25 so far this year.
Analysts say real money accounts with a long term view
should take the rand back to firmer levels, but investors would
have to be convinced about Europe sorting out its problems.
“If we don’t have the worst ending of the euro zone
situation, i.e. the risk-on comes back, the rand will rally. The
house view here is that the euro is going to stay and things are
going to improve over time,” said Murat Toprak, a forex
strategist at HSBC Bank.
A Reuters poll on the rand’s prospects against the dollar
sees the local unit coming out on top by year-end.
Continued…
