Rand Hits Month-High Versus Dollar on Growth Signs, Syria Delay
The rand advanced to its strongest level in a month, leading major-currency gains against the dollar, as evidence of a recovery in global growth boosted South Africa’s export prospects.
U.K. unemployment unexpectedly fell in the second quarter, the nation’s statistics office said. Industrial production and retail sales in China, reports showed yesterday. Manufacturing in South Africa probably expanded 1.6 percent in July from a year ago compared with 0.4 percent a month earlier, according to the median estimate of 12 economists in a Bloomberg survey for a report due at 1 p.m. in Pretoria today. The U.S. delayed a decision on military strikes against Syria.
Evidence of a pick-up in the global economy “has supported risk appetite for commodity-based economies and has proved supportive of the rand,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. (NED) in Johannesburg, said in an e-mailed note. China is the biggest trading partner of South Africa, which is the world’s largest producer of platinum and No. 6 gold miner. The U.K. is the largest provider of foreign capital such as equity, debt and direct investments into South Africa, according to the central bank.
The rand appreciated as much as 0.7 percent to 9.9172 per dollar, the strongest level since Aug. 15. It traded 0.4 percent stronger at 9.9452 as of 11:38 a.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped eight basis points, or 0.08 percentage point, to 8.25 percent. Gold rose as much as 0.4 percent, while platinum added 0.9 percent.
After saying 10 days ago he would ask Congress to authorize using military force, President Barack Obama reversed course yesterday in a nationally televised address and said he would pursue a proposal by Russia to have Syria surrender its stockpiles of chemical arms to international authorities.
“Syria remains the headline issue as the possibility grows that the U.S. might not take military action,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “This creates some possibility that risky currencies could receive support.”
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