Rand Gains as Platinum Strike Ends; South African Yields DropRobert Brand
The rand gained for a second day as an illegal strike at a South African platinum company ended and the dollar weakened against major peers before Federal Reserve Chairman Ben S. Bernanke speaks tomorrow. Bonds advanced.
Anglo American Platinum Ltd., the world’s biggest producer of the metal, said miners at two of its operations returned to work today. Gold jumped to a two-week high as Bernanke prepares to speak amid speculation he will provide further guidance on plans to scale back asset purchases.
“It looks like the strike news is starting to lose its effect,” Jim Bryson, head of foreign-exchange trading at Rand Merchant Bank, said by phone from Johannesburg. “The rand is strengthening in line with everything else. With Bernanke speaking tomorrow, the market is in wait-and-see mode.”
South Africa’s currency advanced 1 percent to 10.0631 per dollar as of 4:12 p.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped 13 basis points, or 0.13 percentage point, to 7.99 percent.
Bullion slid 23 percent last quarter as some investors lost faith in the metal as a store of value and Bernanke said the Fed may slow asset purchases this year if the economy continues to improve in line with its projections. Gold and platinum together account for about 20 percent of South Africa’s exports, according to government data.
Emerging-market stocks gained and South Africa’s benchmark stock index rose for a second day.
The rand stayed stronger after South African President Jacob Zuma fired three Cabinet ministers in his fourth reshuffle of the executive since taking office. Zuma replaced the ministers of communications, human settlements and cooperative governance and traditional affairs.