Rand Gains to Trim Second Weekly Decline on Emerging Assets

The rand gained the most among emerging-market currencies, paring a second straight weekly drop on signals from nations including India and Indonesia that they may support markets. Bond yields fell.

The MSCI Emerging Markets stock index climbed 0.7 percent, trimming the biggest weekly drop in two months, after shares slumped on speculation Federal Reserve stimulus will be cut next month. Indonesia said it plans policies that may include fiscal stimulus while the Reserve Bank of India said yesterday the nation’s economic and monetary policies must focus on preserving financial stability.

“Emerging-market currencies have managed to claw back some losses,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. The “rebound has been assisted by some aggressive central bank action.”

The rand advanced 0.8 percent to 10.2029 per dollar as of 11:38 a.m. in Johannesburg, paring its depreciation this week to 1.1 percent. Yields on benchmark 10.5 percent bonds due December 2026 dropped 9 basis points, or 0.09 percentage point, to 8.57 percent, retreating from the highest close since January 2012.

Euro-area services expanded in August for the first time in 19 months after the 17-nation currency bloc’s economy emerged from a record-long recession, data showed yesterday. German gross domestic product climbed 0.7 percent in the second quarter, data from the country’s Federal Statistics office showed today. A preliminary reading of China’s Purchasing Managers’ Index beat analysts’ estimates yesterday, while first-time jobless claims in the U.S. fell to the least in five years over the past month.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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