South Africa’s rand climbed to a three-week high on Tuesday while yields on bonds fell as hopes of a resolution to Greece’s debt crisis cheered emerging markets.
By 1510 GMT the rand had firmed 1.53 percent to 11.8150 per dollar, within touching distance of the 11.80 resistance level it last touched on April 9.
The local currency, along with its emerging market peers, was boosted by news that Greece had reshuffled its team handling talks with European and IMF lenders.
“The strength of the rand today is a function of the Greek optimism after the PM (Alexis Tsipras) decided to change his negotiating team as a compromise to the ECB,” said Dale Forssman, a fixed-income trader with World Wide Capital Securities.
Government bonds tracked the currency firmer, with yields at a Treasury auction earlier rising, and the benchmark instrument due in 2026 shedding 10.5 basis points to 7.935.
With no major local data due in a holiday-shortened week, traders are likely to eye the U.S. Federal Reserve’s policy statement on Wednesday, where the bank is expected to keep lending rates on hold.
“There have been concerns over the harshness of the winter and how it slowed down the U.S.’s GDP growth, and this has pushed back thoughts of a rate hike,” Forssman said.