Rand Gains Most Among World Currencies as Emerging Markets Rallyby
Currency strengthens beyond 200-day moving average vs dollar
Nedbank's Nalla skeptical about rand sustaining advance
South Africa’s rand rallied the most among major and emerging-market currencies to its strongest level this year against the dollar as investor appetite for risk returned.
The rand gained as much as 2.1 percent to be the best performer among 31 major currencies tracked by Bloomberg, taking its 2016 advance to 8.6 percent. An index of emerging-market currencies strengthened to the highest since July 31 as investors sought out riskier assets and oil prices rebounded. A breach of the 200-day moving average for the rand on Monday for the first time since Sept. 14 may signal further strengthening of the currency.
By 4:07 p.m. in Johannesburg, the rand was 2 percent stronger at 14.2066 to the dollar, while its 200 day average was at 14.4687. It earlier gained to 14.2000, the strongest level since Nov. 26. Yields on benchmark government bonds due December 2026 dropped 10 basis points to 8.88 percent, the lowest since Dec. 9 on a closing basis.
"We will take any good news we can get on the rand, although I am skeptical about how long this lasts," said Mohammed Nalla, head of strategic research at Nedbank in Johannesburg. "The fundamental picture remains the same and this predisposes us to rand weakness unfortunately."