Rand gains first day in three

Comment on this story
NewRandMoney Reuters.

Cape Town - The rand gained for the first time in three days after an unexpected decline in joblessness in Africa’s biggest economy.

Bonds advanced as demand at a weekly government debt auction increased.

Unemployment dropped to 24.1 percent in the fourth quarter from a revised 24.5 percent the previous three months, Statistics South Africa said.

The median estimate of six economists in a Bloomberg survey was for an increase to 24.9 percent.

Factory output expanded 2.2 percent in December, compared with 0.3 percent, a separate report may show at 1 p.m. Johannesburg time.

“Against a backdrop where foreign investors are increasingly discriminating against emerging markets in need of structural changes and/or domestic rebalancing, today’s data releases will underscore where the South African economy stands on both,” Theuns de Wet, head of global markets research at Rand Merchant Bank in Johannesburg, said in a note to clients before the unemployment data was released.

The rand gained 0.5 percent to 11.0856 per dollar by 11:51 a.m. in Johannesburg.

Yields on benchmark bonds due December 2026 fell three basis points, or 0.03 percentage point, to 8.74 percent after rising six basis points yesterday.

Demand at today’s fixed-rate bond auction exceeded the amount of debt on offer by four times, according to central bank data. Investors bid for 9.46 billion rand ($853 million) for 2.35 billion rand of debt, compared with average demand of 8.03 billion rand in the previous four weeks, according to ETM Analytics.


‘Further Improvement’


Federal Reserve Chairman Janet Yellen is addressing US lawmakers on monetary policy today in her first appearance before Congress after the Federal Open Market Committee said last month it will cut monthly bond purchases by $10 billion to $65 billion, citing labour-market indicators that “were mixed but on balance showed further improvement” and economic growth that has “picked up in recent quarters.”

Policy makers next meet on March 18-19.

Foreign investors sold a net 141 million rand of South African bonds yesterday after two days of buying.

Foreigners purchased 848 million rand of equities, according to JSE Ltd. data. - Bloomberg News

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

  5. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. You are only required to verify your email address once to have full access to commenting on articles. For more information please read our comment guidelines