Rand hits week high in emerging market rallyComment on this story
Johannesburg - The rand strengthened over 1 percent against the dollar on Friday, in line with a broad emerging market rally after employment data out of the United States came in line with expectations.
The rand began a pullback from a multi-week low on Thursday after monetary easing measures announced by the European Central Bank boosted high-yielding emerging markets.
The currency traded over 1 percent stronger at 10.5800 to the dollar at 17:38 SA time, after closing at 10.6950 in New York on Thursday. It hit a week high at 10.5606 earlier on Friday.
“There's fresh gains across the board in the EM universe as US non-farm payrolls matched expectations,” 4Cast analysts said in a market note.
The rand remains in a corrective phase after being oversold most of this week, when it hit a 10-week low, dealers said.
Emerging markets were also still enjoying positive sentiment after the ECB rates decision, and were cheered on Friday by a meeting between Russia and Ukraine's leaders, which investors hope signals the start of the end of the Crimea crisis.
“While the rally is mainly driven by the comprehensive range of policy measures revealed by the ECB's Draghi yesterday, it is worth pointing out that President Putin spoke with President-elect Poroshenko in France about potential measures to de-escalate tensions in Ukraine,” 4Cast said.
Government bonds tracked the rand to one-week highs, with yields down 11 basis points to 8.235 percent on the benchmark 2026 issue, and falling 7 basis points to 6.61 percent on the 2015 note. - Reuters