South Africa's rand advanced to fresh 3-month highs against the dollar on Wednesday and may extend those gains further due to rising metal prices.
The rand firmed to 6.6875 to the dollar, its strongest since Jan. 5.
By 08:37 SA time, it was trading at 6.6925 against the dollar, 0.5 percent firmer than Tuesday's New York close of 6.7280.
It has been struggling to pierce 6.68 in the past few days but a breach of that level will open up a Jan 4. high of 6.622.
“The euro has broken higher this morning - that's rand positive. Dollar/rand could test 6.66 but it's oversold at these levels so it should continue to struggle a bit,” said Jim Bryson, chief dealer at Rand Merchant Bank.
“If the euro keeps going we should be looking for the rand to try 6.61, but we are very much euro-dependent,” he said, adding that a record high gold price on Tuesday could provide support.
The euro zone is South Africa's largest trading partner and the rand tends to track movements in the single currency.
The euro hit five-month highs against the dollar before a European Central Bank interest rate decision late on Thursday. Investors expect a rate rise for the first time since July 2008.
Government bonds gained, with the yield on the 2015 bond down 3.5 basis points to 7.71 percent and that on the 2026 issue falling 4.5 basis point to 8.74 percent.
Stocks looked set to open slightly higher, with the JSE's blue-chip June stock futures contract up 0.28 percent before the start of trade at 09am SA time. - Reuters
