South Africa’s rand broke below 10 to the dollar on Tuesday for the first time since July 22, as it continued to confound sceptics with a rally that seen it gain close to 20% this year.
Offshore demand fuelled by a sudden appetite for the yields offered in steep domestic interest rates has helped propel the rand, making it one of the best performing currencies against the dollar this year.
But the break below 10,0/dlr, which dealers said triggered some stop-loss selling of dollars, was short-lived.
At 1115 GMT, the rand was trading at 10,0075/dlr after briefing hitting 9,9850. It was at 10,06/dlr in late Johannesburg trade on Monday.
”I’m favouring a bit of consolidation over the next day or two around these levels before we push firmer, probably between 9,95 and 10,10. I think this market now needs to take a bit of a breather,” said MMS International analyst George Glynos.
The market is waiting for Finance Minister Trevor Manuel’s unveiling of his three-year budget plans at 1200 GMT, in which he is expected to send a clear signal on whether the inflation targets could be altered because of swelling price pressures. – Reuters