JOHANNESBURG, July 27 (Reuters) – South Africa’s rand touched a 3-month high against the dollar on Tuesday and looked set to hold its ground, helped by firmer stocks and speculation of a possible purchase of local group Nedbank by HSBC.
The JSE’s Top-40 September futures contract ALSIc1 ticked up just 0.17 percent ahead of the start of trade on the local bourse at 0700 GMT. European shares looked set to open flat after reaching a five-week high in the previous session.
At 0642 GMT the rand ZAR=D3 traded at 7.3460 to the greenback, off just 0.08 percent from Monday’s close at 7.3400.
The domestic currency briefly flirted with 7.3201/dollar earlier on Tuesday, the strongest it has been since April 30, Reuters data shows.
“I think there’s some interim support around these levels of 7.33/34, but overall there’s still very positive equity markets and positive sentiment,” foreign currency dealer based in Johannesburg said.
“Combined with rumours of some more FDI … with foreign suitors for Nedbank, the rands looks to be in good shape. I think that resistence will now come in at 7.38/40 and in this move we should target around lower 7.20′s.”
Government bonds were firmer in earlier trade, pulling the yield on the benchmark 2015 ZAR157= note three basis points lower to 7.60 percent hile that for the longer-dated 2036 ZAR209= dipped half a basis point to 8.64 percent. (Reporting by Stella Mapenzauswa; Editing by Patrick Graham)