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Johannesburg - The rand extended gains to over 1% against the dollar on Tuesday, tracking a firmer euro and as emerging markets continued to take advantage of a weaker US currency.
The rand broke through resistance at the 10.50 level as investor sentiment favoured risky, high yielding assets while traders were biding time ahead of FOMC minutes on Wednesday and domestic production data on Thursday.
The euro, the currency of South Africa's main trading bloc, hit a session best in afternoon trade, further encouraging rand bulls.
By 16:14 GMT, the rand was up 0.94% to R10.43/$, finally breaking through key resistance barriers after two sessions of balking at the 10.50 level.
Rand bulls rallied to their strongest in the year so far, trading at R10.4180/$ earlier in the day.
Analysts said the 10.41 level would be key to watch for signals of further gains.
"The market has broken sharply today. We think the current
consolidation phase will give way to more (dollar) weakness," Neil Irving of 4Cast said in a market note.
"The next targets are at 10.41 then 10.3615."
Government bonds took advantage of the stronger rand, which suggests rate hike expectations should moderate.
The yield on the 2015 note gave up 3.5 basis points to 6.70%, while the longer-dated 2026 yield fell 6.5 basis points to 8.315%.
The rand broke through resistance at the 10.50 level as investor sentiment favoured risky, high yielding assets while traders were biding time ahead of FOMC minutes on Wednesday and domestic production data on Thursday.
The euro, the currency of South Africa's main trading bloc, hit a session best in afternoon trade, further encouraging rand bulls.
By 16:14 GMT, the rand was up 0.94% to R10.43/$, finally breaking through key resistance barriers after two sessions of balking at the 10.50 level.
Rand bulls rallied to their strongest in the year so far, trading at R10.4180/$ earlier in the day.
Analysts said the 10.41 level would be key to watch for signals of further gains.
"The market has broken sharply today. We think the current
consolidation phase will give way to more (dollar) weakness," Neil Irving of 4Cast said in a market note.
"The next targets are at 10.41 then 10.3615."
Government bonds took advantage of the stronger rand, which suggests rate hike expectations should moderate.
The yield on the 2015 note gave up 3.5 basis points to 6.70%, while the longer-dated 2026 yield fell 6.5 basis points to 8.315%.
