Rand Rallies as Commodities Rise Before U.S. Election Outcome
The rand gained for a second day as investors awaited the outcome of the U.S. Presidential election and after commodity prices rose, boosting South Africa’s export prospects.
The currency advanced as much as 0.5 percent and traded 0.4 percent stronger at 8.6857 per dollar as of 4 p.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped four basis points, or 0.04 percentage point, to 7.65 percent, the lowest since Oct. 22.
U.S. voters decide today between giving President Barack Obama another four years in office or replacing him with Republican challenger Mitt Romney. Prices of metals including copper nickel rose before data this week that may show the U.S. economy stabilising.
“Commodity prices obviously have contributed” to the rand’s rally, William van Rijn, a currency trader at Nedbank Group Ltd. in Johannesburg, said by phone. “The rand has been holding up relatively well, although volumes were light, exacerbating the move.”
The Standard & Poor’s GSCI Index of raw material advanced 1.1 percent, the most since Oct. 9. Metals and other commodities account for 45 percent of South Africa’s exports.
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