Rand Rallies 1st Week in 5 as Jobs Data Boosts Exports Outlook

The rand strengthened for a second day after U.S. jobs data added to evidence of a recovery in the world’s biggest economy, boosting the outlook for South Africa’s commodity exports.

The rand gained as much as 1.1 percent to 8.8545 per dollar, the strongest level since Jan. 23. It traded 0.9 percent up at 8.8742 as of 4:04 p.m. in Johannesburg, bringing its advance this week to 0.8 percent, the first weekly gain in five. Yields on benchmark 10.5 percent bonds due December 2026 dropped five basis points, or 0.05 percentage point, to 7.30 percent for a decline of nine basis points this week.

Hiring in the U.S. increased in January after accelerating more than previously estimated at the end of 2012, evidence the U.S. labor market was making progress even as lawmakers quarreled over the federal budget. Commodity prices rallied and stocks rose as investor appetite for riskier assets improved. Metals and other commodities account for about 60 percent of South Africa’s exports.

“There was a good, solid, non-farm payrolls number out of the U.S., and that lifted risk” appetite, Ion de Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank, said by phone. “Some players decided to take profit on long-dollar positions.”

Payrolls rose 157,000 following a revised 196,000 advance in the prior month and a 247,000 surge in November, Labor Department figures showed today in Washington.

China Manufacturing

The rand was also buoyed by reports showing manufacturing in China, the biggest buyer of South African raw materials, expanded in January, boosting prices of commodities including copper and nickel. The Standard & Poor’s GSCI Index of raw materials climbed as much as 0.6 percent.

The Purchasing Managers’ Index was 50.4 in January compared with 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing as they more than tripled the number of companies surveyed. A separate gauge from HSBC Holdings Plc and Markit Economics covering fewer businesses rose to a two-year high of 52.3 from 51.5. Readings above 50 indicate expansion.

“Chinese figures this morning were mixed, but still consistent with a mild acceleration in the economy,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments.