Johannesburg - The rand gained more than 1 percent against the dollar on Tuesday, buoyed by abating investor aversion towards emerging markets after immediate tensions between Russia and Ukraine appeared to ease.
South Africa's currency also received support from hopes of a breakthrough in a prolonged platinum strike by the Association of Mineworkers and Construction Union (Amcu).
The union, which has been on strike for more than five weeks, revised its wage demands, saying it was now seeking staggered increases that would take the basic entry-level wage to 12,500 rand ($1,200) a month in three years' time, compared to its original demand for increases to be immediate.
The currency firmed to 10.7700/dollar in the session and was trading at 10.7925 at 17:13 SA time.
Immediate tension between Moscow and Kiev also appeared to abate after Russian President Vladimir Putin said he would only use force in Ukraine as a last resort.
The rand, used as a proxy for wider emerging market risk, was the second-biggest gainer against the dollar after the Russian rouble among a basket of emerging market currencies tracked by Reuters.
“We believe the rand is oversold and will track back toward 10.35/dollar by year-end as the risk-off environment wanes and QE tapering remains well communicated,” Annabel Bishop of Investec said in a long-term currency outlook.
The rand has lost 3 percent against the dollar since the start of the year, on top of a loss of roughly a quarter of its value in 2013.
Yields on government bonds dropped 3 basis points on the 2015 note to 7.13 percent and 1.5 basis points to 8.585 percent on the 2026 issue. - Reuters