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Johannesburg - South Africa's rand hit a fresh 2 1/2 year high against the dollar on Friday, gaining momentum to challenge the key 7.15 technical level, and local stocks also gained.
The rand was trading at 7.1801 to the dollar at 20:15, 0.77% stronger than its previous New York close of 7.2375. Earlier it hit 7.1527, its strongest since early 2008.
The 7.15 area is key resistance for the rand, tested and held in August 2008 and repeatedly since the fourth quarter of 2009.
"The rand strengthened after figures (from the US). We were around 7.22/dollar at the time, the euro had been up to $1.2870 so a slightly weaker dollar sent the rand below 7.18," Jim Bryson, dealer at Rand Merchant Bank said.
Charts suggest further strength for the rand that has traded below its 200-day moving averages for more than two weeks.
Dealers are looking at 7.10 as the next key level if the 7.18 break is sustained.
"We did get back through (7.18), we've gone back above it now so if we break 7.18 this time we will be looking for 7.10," Bryson said, adding the rand could touch 7.10 as early as next week, after a U.S market holiday on Monday.
Reserve Bank Governor, Gill Marcus, said on Thursday the Bank was constantly grappling with the rand's strength. Its rally supports a case for a rate cut next week.
Local assets have largely shrugged off labour strikes in Africa's largest country.