Rand hits a three-month high
Currencies / 02 Jan '13, 09:03am
Johannesburg - The rand touched a three-month high on the first trading day of 2013, lifted on Wednesday by a last-minute deal in the United States to resolve the “fiscal cliff” crisis.
The rand was at 8.430 to the dollar in early morning trade, 0.4 percent stronger than its close in New York on Monday. The currency reached a high of 8.420 earlier in the session - a level not seen since October.
The U.S. Congress approved a bill on New Year's Day that will raise taxes on top earners, averting the automatic implementation of $600 billion in spending cuts and tax increases that could have pushed the world's biggest economy into recession.
“It's pretty much on the back of this deal in the U.S. that we've seen a bit of risk-on this morning,” one trader said.
If the positive sentiment continues, the rand should trade in the 8.35-8.55 range this week, the trader added.
The yield on the 2026 government bond was 2 basis points lower at 7.26 percent while that on the 2015 paper was flat at 5.33 percent. -Reuters