The rand advanced to its strongest level in more than two months versus the dollar as gold soared to a record and the deadlock over America’s debt ceiling spurred investors to look for alternatives to the U.S. currency. The rand climbed as much as much as 0.4 percent to 6.6489 per dollar, the highest level since May 6. It traded at 6.6420 as of 10:40 a.m. in Johannesburg for a seventh successive day of gains, the longest winning streak since April 2010. South Africa’s currency climbed 0.5 percent to 9.6265 per euro. Gold rose to $1,625.70 in Singapore, beating the July 25 peak of $1,624.07, as investors sought to protect their wealth against the possibility of a U.S. default that may come as soon as next week and cost America its AAA credit rating amid a standoff over the country’s $14.3 trillion debt limit. The dollar fell against most of its peers. “The U.S, debt impasse is hurting the dollar more than it is hurting risky assets,” John Cairns and Nema Ramkhelawan- Bhana, currency strategists at Rand Merchant Bank in Johannesburg, said in a research note. Rand strength “could well extend into next week”, they wrote. U.S. politicians remain deadlocked after a House vote on Speaker John Boehner’s two-step plan to raise the debt ceiling and pare the deficit was postponed from today. President Barack Obama has threatened to veto the measure, sending the dollar to a record low against the Swiss franc yesterday, while pushing the cost of insuring U.S. debt to a 17-month high. Rand Forecast The rand may extend gains to 6.54 per dollar after breaching 6.65, a significant support level for the dollar, BNP Paribas SA analysts led by London-based Paul Mortimer-Lee said in an e-mailed research note. Support and resistance levels are where traders cluster automatic orders to buy or sell a currency. The probability of the rand strengthening to 6.54 per dollar within the next week was 44 percent, implied volatility from options trading monitored by Bloomberg showed when the rand was at 6.6422 per dollar. Bonds gained, the 6.75 percent securities due 2021 added 6 cents to 89.74 rand, reducing the yield one basis point, or 0.01 percentage point, to 8.31 percent. To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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