Johannesburg The rand recorded a six-year high versus the stricken dollar yesterday, with more gains predicted.
At 5pm the rand was bid at R5.776 to the dollar, a gain of 10.72c from the same time on Friday.
It was an up and down day for the rand, with a morning rally reversing as the price of gold, the countrys main export, declined.
At 1pm, the rand was bid at R5.82 a dollar. Gold fell as much as 2.1 percent to $449.84 an ounce as the dollar advanced against the euro in intraday trade.
Against the euro, the dollar climbed to $1.3239, although by 5pm in Johannesburg it was unchanged on the day at $1.326. The euro was at $1.3235 in late European trade.
Traders «watched the gold price and euro move a little weaker and probably locked in some profits», said Michael Keenan, an analyst at Econometrix Treasury Management.
But after 3pm, both gold and the rand rallied sharply. Gold added 0.25c to $451.25 in London and is near 16-year highs.
The local currency might trade between R5.60 and R5.80 a dollar today, Keenan said, adding: «A decisive break below R5.80 may see the rand move to R5.60.»
A trader said: «The rand does feel slightly overdone at this stage but that is what I said 10c ago.» He said R5.74 to the dollar was the next short-term technical target for the currency.
Technical analysts have said the rand could make a move to R5.66 a dollar in the coming days. In one bullish sign, it is much firmer than its 14-day moving average of around R6 to the dollar.
The rand also surged 22.5c to R10.914 against the pound and 14.2c to R7.659 to the euro.
But bonds declined after a government report showed credit growth accelerated to a nine-month high in October. Credit growth quickened as the lowest benchmark interest rates in 23 years boosted demand for loans.
Borrowing by households and companies rose at an annual rate of 8.23 percent in October, the central bank said.
Annabel Bishop, an economist at Investec, said: «Interest rates will remain unchanged for the rest of this year as the ongoing consumer spending spree, escalating debt levels, rising nominal unit labour costs and real wage increases all argue against a cut.»
By 5pm the yield on the R153 had weakened 4.5 basis points to 8.245 percent bid. The yield on the R194 had weakened 5.5 basis points to 7.815 percent.
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