SA rand firms

JOHANNESBURG. — South Africa’s rand rallied to its strongest in nine months yesterday, still riding the wave of positive sentiment after Cyril Ramaphosa’s election as the leader of the ruling African National Congress and a global rise in resources prices.

At 1500 GMT the rand was 1,1 percent firmer at 12,37 to the dollar, against a close of 12,5075 in overnight trading in New York.

Technical indicators pointed to a continued run of gains in the currency as year-end approached, with 12,31 the next target after the currency touched a nine-month peak of 12,3450 earlier in the session.

The rand is now trading below its 200-day moving average, a confirmation of the firmer price trend that is likely to spur further buying as investors who were short on the rand look to position for the bull rally. Volumes were thin after holidays on Monday and Tuesday, exaggerating moves in either direction. The currency lost ground in the Asian and US sessions before recovering, with trade mainly at the 12,50 technical mark.

Commodity prices hit multi-year highs, though gold edged slightly lower on day, as optimistic views on Chinese demand for metals and higher oil prices aided resources-linked currencies. The rand’s gains were also linked to a rise in the euro because the European Union is South Africa’s largest trading partner.