Rand firms as investors seek higher return
THE rand climbed to its strongest in nearly a week against the dollar, boosted by a search for higher yield as investors bet that interest rates would stay depressed in leading economies.
Stocks put in modest gains in line with global peers, with the benchmark Top 40 index adding 0.26 percent to 44 920. while the wider All-share index ended 0.35 percent higher at 51 276. The rand took in its stride a warning from Moody’s that South Africa was the most exposed in the sub-Saharan Africa region to market volatility linked to Britain’s decision to leave the EU.
By 1545 GMT, the rand was trading 1.3 percent firmer at 14.5850 per dollar from an overnight close of 14.7800 in New York.
This was in spite of stronger- thanexpected non-farm payrolls numbers out of the US, which however left investors still unconvinced that the Federal Reserve would raise interest rates this year.
“Global markets still don’t believe that the US is actually going to hike anything this year, so it’s still going to be very much a lowinterest environment globally,” Treasury One dealer Phillip Pearce said.
SAdebt also ended the day higher as a result, with the yield for the 2026 benchmark shedding six basis points to 8.71 percent. – Reuters