* Rand retreats from year high, seen as overbought
* Bonds follow rand weaker, yields up 8 basis points
JOHANNESBURG Feb 6 (Reuters) – South Africa’s rand
lost nearly 2 percent against the dollar on Monday, retreating
further from last week’s 5-month highs as investors used delayed
debt talks in Greece to take profits on a currency some said had
rallied too quickly.
The rand weakened to 7.6540 compared to a close of
7.52 in New York on Friday.
Markets were keeping a close eye on a meeting of Greece’s
political leaders to thrash out a programme of reforms in
exchange for a bailout deal. It was postponed to Tuesday,
dampening investor appetite for riskier assets.
Analysts pointed to a big barrier in the rand’s rally at
7.50, which seemed to have kicked in during the session.
“A former peak (Aug 2011) at 7.5000 and a few Fibonacci
retracement and projection levels nearby have potentially halted
the (dollar) decline,” said Kamran Sheikh, a technical
strategist at Informa Global Markets.
“Furthermore, the market is oversold. I think a corrective
rally is possibly around the corner,” Sheikh added.
Yields on government bonds were up around 8 basis points to
6.51 percent on the three-year issue and to 8.165
percent on the 14-year bond, with prices retreating
from last week’s 2012 highs in tandem with the currency.
Continued…
