JOHANNESBURG: The rand touched its highest in almost three weeks against the dollar on Tuesday and was among the strongest-performing emerging currencies but government bonds edged up only slightly as some of the recent buoyant demand for local debt tapered off.

The rand hit a session high of 7.7680 to the greenback, its firmest level since April 4, and was up 0.6 percent at 7.7927 by 1543 GMT.

"The euro helped it a bit firmer. It's been quite buoyant today, and it helped the rand test support levels to the downside," RMB trader Ian Martin said.

Having breached a key technical line on the chart at 7.82, the rand could now target 7.77 to the dollar.

"If we manage to close below 7.77 today, we should start targeting the all-important 7.70 level again," Martin said.

Government bond yields crept lower after a weekly government auction showed lukewarm demand, particularly at the longer end of the yield curve.

The yield on the benchmark three-year bond closed four basis points lower at 6.49 percent while that for the 14-year issue dipped two basis points to 8.165 percent.

"Local and off-shore real money accounts have been better sellers of very long-end stock and better buyers of very short-end stock," Absa Capital bond trader Daniel Sabiston said.

"The buyers we are seeing are offshore accounts who obviously are taking a little bit of notice of the WGBI index story from last week and looking to pick up a little bit of stock on the back of that. But overall the buying has tapered off for now."

South African government bonds soared and yields fell sharply last week after Citigroup said it could later this year include local debt in its World Government Bond Index.