Rand firms to 8.89Comment on this story
Cape Town - The rand gained for the first time in three days as stocks and metal prices advanced on speculation a global economic recovery is gathering momentum, boosting the prospects for South Africa’s exports.
The currency strengthened 0.3 percent to 8.8947 per dollar as of 9:46 a.m. in Johannesburg, after reaching the lowest level in more than a week yesterday as North Korea tested a nuclear weapon, prompting investors to shun riskier assets.
Yields on benchmark 10.5 percent bonds due December 2026 dropped three basis points, or 0.03 percentage points, to 7.30 percent.
Industrial production in the euro area probably rose in December, according to economist estimates before data today.
In his first State of the Union address since winning re-election, President Barack Obama called for a higher minimum wage to boost the US economy.
Commodities accounted for 53 percent of South Africa’s export earnings in 2012, according to government data.
“Global equity markets continue to surge,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments.
“Risk-off from the North Korea nuclear tests rapidly faded and attention switched to the hopes for the global economy.”
The S&P 500 Index climbed to its highest level since 2007 yesterday and the MSCI Emerging-Markets stock index gained the most in two weeks today. South Africa’s benchmark stock index rose for the first time in three days as prices of metals including platinum gained. Copper for three-month delivery added as much as 0.4 percent.
Foreign investors bought a net 2.1 billion rand ($236 million) of South African stocks and bonds yesterday, bringing foreign flows into the nation’s equity and debt market this year to 11.6 billion rand, according to Bloomberg calculations from JSE data. - Bloomberg