Johannesburg - South Africa's rand ended Thursday's session firmer against the dollar after better-than-expected domestic production numbers saw investors trim long dollar positions.
The rand initially hit a fresh 4-year low of 9.2925 to the dollar early in the session before stronger-than-anticipated mining and manufacturing data drove investors to buy some of the local currency.
Statistics South Africa said total mining output was up 7.3 percent in January, compared with a 7.5 percent contraction in December. Production of platinum group metals rose 1.9 percent from a 23.2 percent plunge in December.
Manufacturing data for January also surprised on the upside with output up 3.9 percent, compared with economist expectations for 2.4 percent.
The production side of South Africa's economy dragged on growth towards the end of 2012, mainly because of mining strikes in the platinum belt. The January data signalled that the strike effect may have worn off.
By the afternoon session the rand had strengthened to 9.1795, breaking through technical resistance at 9.20.
“Dollar/rand may settle back in the 9.12-9.18 range if it closes below the 9.18-9.20 area,” said Christopher Shiells, emerging market analyst at Informa Global Markets.
“We will need some more bad news to push it higher again, perhaps the spreading of strikes in the coal sector and related power disruptions at Eskom.”
Production had stopped for a day at Anglo American's Kleinkopje coal mine during an illegal strike that ended on Wednesday. Miners had also staged walk-outs at 5 Exxaro mines earlier in the month.
South Africa generates about 85 percent of its electricity from coal, with Anglo and Exxaro providing most of state-owned power utility Eskom's coal supply.
Government bond prices rose with the recovering rand, with yields on the 2015 and 2016 benchmark issues down to 5.395 percent and 7.43 percent respectively. - Reuters