RAND AND STOCKS SOAR

THE RAND rallied to its highest in more than two years against the dollar yesterday, as investors cheered the latest evidence of a sustained rebound in global economies and as US Treasury yields pulled back.

At 5.25pm, the rand was 1.27 percent firmer at R13.59 against the dollar, trading at its firmest since early February 2019.

With the local economy remaining weak and facing power cuts, the rand’s recent rally has been mainly on the back of global factors, including higher commodity prices which benefit resource-rich South Africa and expectations US lending rates will stay lower for longer.

Riskier currencies, such as the rand, thrive on US interest rates remaining low because they benefit from the interest rate differential that increases their appeal for carry trade.

Investors waited for crucial US jobs data tomorrow to assess what the increasing evidence of a faster-than-expected economic recovery would mean for central bank policy in the US.

“This figure could also give markets some short-term guidance as to the economy in the US which is likely to have a systemic effect across financial markets,” said DailyFX analyst, Warren Venketas.

Bonds were a touch firmer, with the yield on the 2030 government issue down 1.5 basis points at 8.89 percent.

Stocks continued their upward movement with the main index racing past its all-time peak seen in early May to hit a record yesterday, as raging growth prospects in the US boosted industrials and financial stocks.

The JSE all share index ended up 0.18 percent at 69 049.04 points. The blue-chip index of Top40 companies, often a gauge of the performance of the best of the listed companies, was up 0.14 percent at 62 786.67 points. I Reuters