The rand appreciated and had its biggest six-day gain in more than two months after Italian Prime Minister Mario Monti introduced a proposal to cut his nation’s debt, boosting appetite for riskier assets.
South Africa’s currency strengthened as much as 0.7 percent to 7.9892, its highest level on a closing basis since Nov. 11. It traded 0.6 percent firmer at 7.9958 as of 9:31 a.m. in Johannesburg, adding to last week’s 6.2 percent advance.
Standard & Poor’s GSCI Index of 24 commodities advanced 0.4 percent, a second day of gains. Monti will present the plan, designed to reduce the euro-region’s second-biggest debt, to policy makers in Rome today. German Chancellor Angela Merkel is scheduled to meet French President Nicolas Sarkozy to advance a plan for stricter enforcement of the region’s deficit rules that will be presented to European Leaders at a summit on Dec. 9.
“Weekend reports of a new austerity plan for Italy have kept the mood risk-on, with the rand stronger this morning,” Nomvuyo Guma, a Johannesburg-based currency strategist at Standard Bank Group Ltd., and colleagues wrote in an e-mail. “We anticipate that the rand’s strengthening bias will continue as we head into the holidays. The rand has a cyclical tendency to strengthen in December, which, barring renewed risk aversion brought about by the euro zone, should keep it well supported over the coming weeks.”
South Africa’s 13.5 percent bonds due 2015 declined for the first time in six days, pushing up the yield 2.6 basis points, or 0.026 percentage point, to 6.664 percent.
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