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JOHANNESBURG (Reuters) - South Africa’s rand edged firmer to a new five-week best on Tuesday, boosted by greater risk demand as U.S. treasuries slipped and global commodity prices rallied.
At 1520 GMT the rand was 0.15% firmer at 15.5425 per dollar, having touched 14.4900 earlier, its best since Feb. 25.
The greenback slipped to a two-week low against a basket of currencies on Tuesday, as traders booked profits after a strong March. A fall in Treasury yields from recent peaks also put pressure on the dollar.
Spot gold was up 0.4%, while platinum gained 2%. Copper was also on the rise, adding more than 2%.
“In all, the risk environment is supportive of the rand. The local currency’s persistent strength is underpinned by meaningful export activity, which is borne out in SA’s trade statistics,” said RMB’s Nema Ramkhelawan-Bhana in a note.
“In the absence of any further negative local news the rand should maintain a strengthening bias.”
After a slow start to its COVID-19 vaccine procurement and rollout programme, and fears of a reintroduction of tighter lockdown measures, South Africa is ramping up inoculations.
The country has signed an agreement to buy 20 million doses of the Pfizer-BioNTech dual-shot COVID-19 vaccine, a senior government official said, boosting plans to accelerate the pace of vaccinations from this month.
Bonds firmed, with the yield on the benchmark government bond due in 2030 falling 10 basis points at 9.465%.
The Johannesburg Stock Exchange (JSE) extended its run of gains as positive growth indicators in the United States and China pumped momentum into shares globally.
The benchmark FTSE/JSE all-share index went up by 1.23% to end at 68,064 points and the bluechip FTSE/JSE top-40 companies index closed up 1.27% to 62,372 points.
“Strong commodity prices globally and stable yields in the U.S. have kept the risk-on mood in emerging markets and that is what is driving the local market,” said Sithembile Bopela, Investment Analyst at FNB.
She said there were structural deficiencies in the local economy that were capping the gains, visible in the weak bank index, but investors were largely relying on global cues.
