JOHANNESBURG (Reuters) - The rand was at a two-month high against the dollar in early Wednesday trade, as the euro gained and commodity prices were slightly firmer, all supporting the rand's attempt at firmer levels. The rand opened firmer below 8 rand resistance and gained to a high of 7.8961, a level it last hit on November 14. Dealers said continued euro strength has assisted the rand to test beyond the 7.90 level to the dollar. "Event risk remains around the outcomes of the Greek PSI talks, but we like the rand to remain strong as risk-on trades remain in play," said Brigid Taylor, head of institutional sales at Nedbank. The euro was trading at 1.3020 to the dollar at 0630 GMT. If the rand convincingly breaks 7.90, it opens the door to 7.75 levels. Bonds followed the currency firmer and yields dropped on the government benchmarks. The yield on the three-year bond was down by 6.5 basis points to 6.585 percent, while the longer 2015 issue gave up 5 basis points to 8.265 percent. The government will announce its issuance plans for next week at 0900 GMT, following a successful sale of 2017 and 2021 bonds in the previous session which saw prices rise substantially. Market focus will be on the Greek talks about avoiding a messy default that would raise the likelyhood of contagion to other euro zone countries and depress global economic growth. Investors are likely to completely shun risky emerging market assets in such a scenario and local dealers would have to position themselves accordingly.

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