Rand tracks euro to strong­est level in weeks

Weekend Argus (Saturday Edition) - - BUSINESS -

THE RAND gained as much as 1.4 per­cent against the dol­lar yes­ter­day to its strong­est level in nearly three weeks, track­ing a firmer euro and on course for its big­gest weekly gain since April.

Govern­ment bonds also soared to three­week highs, with bench­mark yields fall­ing about 14 ba­sis points as in­vestors bought into South Africa’s liq­uid debt mar­ket which of­fers higher re­turns than those in de­vel­oped economies. The rand briefly touched a ses­sion high of 7.9727 to the green­back, its firmest level since Novem­ber 14, be­fore pulling back to 8.0284 by 1548 GMT.

“The rand took its cue from a stronger euro. Sen­ti­ment re­mains cau­tiously op­ti­mistic,” a rand dealer in Jo­han­nes­burg said, al­lud­ing to a sum­mit next week where EU lead­ers will make a fur­ther at­tempt at tack­ling the bloc’s sov­er­eign debt cri­sis.

Fi­nance Min­is­ter Pravin Gord­han warned that fail­ure by Europe to re­solve the cri­sis would have “mas­sive con­se­quences” for the global out­look, say­ing the rapid flow of cap­i­tal in and out of emerg­ing mar­kets was hav­ing ma­jor dis­rup­tive ef­fects.

Yes­ter­day the yield on South Africa’s four-year bond dropped 14 ba­sis points to 6.62 per­cent while that on the 2026 was down 13.5 ba­sis points at 8.325 per­cent. – Reuters

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