Rand gains towards 10.5 against US dollar

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NewRandMoney Reuters.

Johannesburg - South Africa's rand posted a fifth straight session of gains against the dollar on Thursday after a surprise rise in US jobless claims dampened concerns that the Federal Reserve will have to start raising interest rates soon.

At 17:43 SA time, the rand was trading at 10.5400 to the greenback, 0.28 percent stronger on the day.

Earlier it touched a session high of 10.5225, its strongest in more than two weeks and within striking distance of the key 10.50 mark.

“I think the rand will hold at 10.50 for the next 24 to 48 hours. It's a very psychological level,” said Cheslyn Francis, a currency trader at Afrifocus Securities in Johannesburg.

Earlier in the session Statistics South Africa said mining output dropped 5.7 percent in June compared to a 6.4 dip in May but marginally healthier than a Reuters forecast of a 5.85 contraction.

Government bonds outperformed the currency, with yields on both benchmarks falling after an unexpected 0.2 percent contraction in German GDP in the second quarter shunted European investors to seek higher-yielding emerging market debt.

The yield on the 2015 paper shed 8.5 basis points to 6.58 percent, while the yield on the 2026 paper dropped 8 basis points to 8.23 percent. - Reuters

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