Rand Gains First Day in Six as Commodities Rally; Bonds Advance
The rand strengthened for the first time in six days, paring its first weekly decline in three, as metal prices rallied, boosting South Africa’s export prospects. Bond yields fell.
Copper rebounded from its worst level in 20 months and gold rallied from the lowest since September 2010 as the Standard & Poor’s GSCI Index (SPGSCI) of raw materials rose. Metals and other commodities account for more than 50 percent of South Africa’s exports, according to government data.
The rand’s decline to near a four-year low yesterday was “met with some good export supplies of dollars,” supporting the South African currency, Nedbank Group Ltd. (NED) strategists led by Mohammed Nalla said in e-mailed comments.
The rand appreciated 0.2 percent to 10.2212 per dollar as of 11:07 a.m. in Johannesburg, cutting its decline this week to 2.8 percent. Yields on benchmark 10.5 percent bonds due December 2026 dropped nine basis points, or 0.09 percentage point, to 8.18 percent. The yield is up 41 basis points this week.
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