Rand hits fresh 1-week low

Johannesburg - South Africa's rand fell sharply to fresh one-week lows against the dollar on Wednesday and was see being pressured in the next few days with the Greek debt crisis dominating investors' minds.

The rand firmed to a two-month high of 7.8961 earlier, which attracted importer buyers of dollar and it quickly retreated.

Government bonds mirrored the rand's weakness, with the longer end of the curve coming under more pressure after the government said it would issue three bonds next week mainly from the long end.

The 2015 bond yield went up one basis point to 6.66 percent and was up six basis points on the 2026 issue to 8.375 percent.

The rand was the worst performer in the session among 20 emerging market currencies tracked by Reuters and there will likely be no respite in the next few sessions.

It was last trading at 8.04, from Tuesday's New York close of 7.9250.

"Some stops on short positions were triggered around the strong 8.0 resistance area prompting USD/ZAR to spike," said Anisha Arora, emerging market analyst at 4CAST.

She said another visit to 7.90 to was unlikely as long as the euro remained below highs of $1.3063 seen on Tuesday.

The rand weakened by 22 percent last year against the dollar and while it has recovered from 2-1/2 year lows of 8.61 hit in November it is still volatile.

Investec economist Annabel Bishop said that volatility would persist through 2012, and there was a 60 percent chance of the currency ending the year at 8.10 to the dollar if there was a resolution to the European debt crisis.

On the data front, producer price inflation data for December will be released on Thursday and the market is expecting PPI to be steady at 10.1 percent year-on-year.