JOHANNESBURG. — South Africa’s rand yesterday recovered some of its losses from a rout in the previous session as traders bought the dip and the dollar rally marched on, causing the currency to break through key levels. At 0630 GMT the rand was 0.45 percent firmer at 12.2950 per dollar compared to an overnight low of 12.3900, its weakest level in the three months.
The greenback was at a three-month high against a basket of currencies early yesterday, boosted by the U.S. 10-year Treasury yield climbing toward the psychologically key 3 percent level.
Some investors who were long the rand saw stop losses triggered between 12.30 and 12.34, although a number of analysts view 12.50 as the rand’s fair value mark while technical indicators were already signalling oversold levels.
“I would suggest that we still have room for further weakness but will not be filling my boots with dollars just yet given the proximity of the resistance level at 12.40,” said chief currency trader at Standard Bank Warrick Butler in a note.
“Instead I will buy the dip to 12.25 or alternatively hope I get a few in on a break above 12.40,” Butler added.
Bonds remained weak, with the yield on the benchmark paper due in 2026 up 2 basis points to 8.175 percent. — Reuters.