S.Africa's rand hits new 2-1/2 yr high, stocks up

Fri Sep 3, 2010 5:02pm GMT

[-] Text [+]

* Rand firms to new high as dollar softens

* Government bonds mixed, market expects 50 bps rate cut

* Stocks follow global markets higher

JOHANNESBURG, Sept 3 (Reuters) - South Africa's rand hit a fresh 2 1/2 year high against the dollar on Friday, gaining momentum to challenge the key 7.15 technical level, and local stocks also gained.

The rand ZAR=D3 was trading at 7.1801 to the dollar at 1815 GMT, 0.77 percent stronger than its previous New York close of 7.2375. Earlier it hit 7.1527, its strongest since early 2008.

The 7.15 area is key resistance for the rand, tested and held in August 2008 and repeatedly since the fourth quarter of 2009.

"The rand strengthened after figures (from the U.S). We were around 7.22/dollar at the time, the euro had been up to $1.2870 so a slightly weaker dollar sent the rand below 7.18," Jim Bryson, dealer at Rand Merchant Bank said.

Charts suggest further strength for the rand that has traded below its 200-day moving averages for more than two weeks. Continued...

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