Rand Gains to 6-Week High as China Growth Boosts Stocks, Metals

The rand strengthened to a six-week high against the dollar after China’s gross domestic product expanded more than economists estimated, boosting stock and commodity prices.

South Africa’s currency appreciated as much as 1.4 percent to 7.9943 per dollar, the strongest level since Dec. 8. It traded 0.7 percent stronger at 8.0546 per dollar as of 5:08 p.m. in Johannesburg. Against the euro it climbed 0.3 percent to 10.2475, headed for a four-month high.

China’s economy expanded 8.9 percent in the three months ended Dec. 31 from a year earlier, the statistics bureau said, beating the 8.7 percent gain forecast in a Bloomberg survey. The Standard & Poor’s GSCI Index of raw materials gained the most in two weeks and South Africa’s benchmark stock index rose to a record, led by miners including Anglo American Plc and BHP Billiton Ltd. China is the biggest buyer of South African raw materials.

The Chinese growth data “is an ideal result in that growth is fast enough to dissipate fears of a hard landing but slow enough to generate scope for monetary easing,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “Our call for a strong rand is back on.”

Copper advanced to near a four-month high in New York, while the prices of other metals including nickel and platinum gained. Raw materials account for about 60 percent of South Africa’s exports.

“Commodity prices are substantially firmer this morning, gold and other metals in particular, while Asian markets are in the black,” Nomvuyo Guma, a currency strategist at Standard Bank Group Ltd. In Johannesburg, said in e-mailed comments. “These indicators imply that risk is back on, and the rand is thus likely to enjoy further strength today.”

South Africa’s 6.75 percent bonds due 2021 gained for a second day, driving the yield down three basis points, or 0.03 percentage point, to 8.03 percent.

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