Johannesburg - The rand held steady against the dollar early on Wednesday and looked set to test fresh 2014 highs after breaking through technical levels as global investors continued to buy in to high-yielding emerging market assets.
At 08:19 SA time, the rand traded slightly firmer at 10.2895 to the dollar, from a 10.3045 close in New York on Tuesday.
“Rand bulls have the edge for a while longer,” said Barclays technical strategist Judy Padayachee.
“While dollar/rand holds below 10.30, the risks are for a drop towards the 10.00-10.10 area before potential bottoming signals could emerge.”
However, the rand's rally could be stemmed by violence in the platinum mines as the denouement of a crippling 16-week strike approaches.
Stick-wielding members of the militant Amcu union were blocking the entrance to Lonmin's Marikana mine early on Wednesday, keeping out workers who want to break the strike and report for duty.
An initial resistance barrier for the rand is at the 2014 high of 10.2725, followed by December 18 level of 10.2200.
Yields on government bonds gave up 3 basis points on the benchmark 2026 issue to 8.065 percent and dropped 2.5 basis points to 6.51 percent on the 2015 note.
South Africa will release business confidence figures for April at 11:30 SA time, and retail sales data for March.
Expectations are for growth to have slowed slightly to 2 percent. - Reuters