* Rand looks to 7.90/dollar
* All-share stocks index hit record high
* Debt auction strong, but yields up after Fitch move
(Adds details, background)
JOHANNESBURG, Jan 17 (Reuters) – South Africa’s rand
extended gains against the dollar on Tuesday to hit its
strongest level in a month as investors returned to risky assets
after higher-than-expected economic growth data in China.
The rand firmed as much as 1.3 percent against the
dollar to hit a one-month high of 7.9928.
The rand has been struggling to break below 8.00 since
hitting a 2-1/2 year low of 8.61 in November. Its attempt last
week was halted by Fitch’s surprise move on Friday to downgrade
South Africa’s outlook, but the currency has since recovered.
Demand at a weekly debt auction was firm but yields tracked
higher with dealers saying Fitch’s move to downgrade South
Africa’s ratings outlook on Friday had some impact on bonds.
Trading was cautious on Monday after Standard and Poor’s
downgraded credit ratings on nine European countries over the
weekend but the mood changed after China announced
better-than-expected economic growth in the last quarter of
2011.
“The market has taken the downgrades in Europe well and
general sentiment toward risk is much better. Gold is trading
back up at $1,660 an ounce and equities are in the green across
the board,” said Brigid Taylor, head of institutional sales at
Nedbank.
Continued…
