Fading Brexit fear fuels rand rise

Johannesburg - The rand extended three days of gains against the dollar on Tuesday, as cautious optimism that Britons would vote to stay in the European Union kept global risk appetite intact.

By 09:01 the rand was trading at R14.8200/$, up slightly from its New York close of R14.8470/$.

The currency had hit R14.7600/$, adding to Monday's strong gains, as investors bet that a June 23 referendum would not result in Britain leaving the EU.

Charts show that sustained rand gains could see the currency pair target support at about 14.4500.

"Last night's close below the 200 day moving average is positive for the rand and as long as it doesn’t now trade back above R15.15/$20 I think we are still due further rand strength," Standard Bank trader Warrick Butler said.

"A break of the June 8 lows of R14.65/$ will most likely lead to further dollar losses to at least R14.45/$," he said, referring to the date that Fitch affirmed South Africa's investment grade credit rating.

Government bonds however pulled back slightly from Monday's seven-week highs. The yield on the 2026 benchmark rose 2 basis points to 9.02%.

The bourse opened slightly softer, with the Top 40 and All-share indices each dipping 0.4%.