Rand Appreciates on U.S. Jobs Data, European Refinancing Take-Up

The rand strengthened for the fifth time in six days after U.S jobless claims fell to their lowest since April 2008 and euro-area banks took larger-than-forecast loans from the European Central Bank in a refinancing offer, boosting appetite for risk assets.

South Africa’s currency appreciated as much as 1.8 percent versus the dollar and traded 1.3 percent stronger at 8.1565 as of 4:36 p.m. in Johannesburg, the best performer among 16 major currencies tracked by Bloomberg. The rand has fallen the most this year among its emerging-market peers, down 19%. Against the euro, it strengthened 1.6 percent to 10.6284.

Jobless claims fell by 4,000 to 364,000 in the week ended Dec. 17, Labor Department figures showed today in Washington. The median forecast of 45 economists surveyed by Bloomberg News projected an increase to 380,000.

“Where we had been in a rather shaky environment things are certainly stabilizing a bit,” Leon Myburgh, a Johannesburg-based analyst at Citigroup Inc., said by phone. “Portfolio flows might improve slight. Commodity prices might recover.”

Foreign investors sold a net 16.9 billion rand ($2 billion) in South African equities in the year through Dec. 15, according to data supplied by JSE Ltd., operator of Johannesburg’s stock exchange. Net purchases of South African bonds reached 46.8 billion rand during the same period. Last year, foreigners bought a net 57 billion rand of debt and 36.4 billion rand in equities.

Pressure Easing

European Central Bank President Mario Draghi is scheduled to speak today after 523 euro-area lenders took a record 489 billion euros ($641 billion) in loans from the Frankfurt-based central bank yesterday. Banks need to refinance more than 600 billion euros of debt maturing next year, about three-quarters of which is unsecured, the Bank of England said this month.

“The net result is that this should over time ease the funding pressures on the banks and help support the sovereign debt markets,” George Glynos, an economist at Johannesburg-based ETM Analytics, wrote in e-mailed comments today. “One now feels there is a greater probability that the dollar-rand heads back below the 8 rand handle once more.”

South Africa’s 13.5 percent bonds due 2015 advanced for a sixth day, driving the yield down three basis points or 0.03 percentage point to a two-week low of 6.77 percent.

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