© Bloomberg. A collection of mixed denomination South African rand coins sit in an arranged photo in Johannesburg, South Africa, on Thursday, June 22, 2017. South Africa’s inflation rate rose for the first time this year in May after food-price growth quickened from the slowest pace since December 2015.
(Bloomberg) — South Africa’s rand traded below 12 per dollar on Wednesday for the first time since May 2015, extending a rally sparked by an improving domestic political environment and supported by global risk-on sentiment and the greenback’s retreat.
The currency advanced 0.5 percent to 11.9711 per dollar by 10.45 a.m. in Johannesburg, bringing gains in the past three months to 15 percent, the most out of 31 major currencies tracked by Bloomberg. The yield on rand-denominated government bonds due December 2026 fell four basis points to 8.32 percent, the lowest since March.
The election of Cyril Ramaphosa as head of the ruling African National Congress in December, setting him on a path to take over from President Jacob Zuma, has fueled optimism South Africa may avert further credit-rating downgrades as the new leadership takes steps to root out corruption and stimulate the ailing economy. Inflows into the nation’s stocks market are running at record levels.
“Investors are loving us at the moment,” said Phillip Pearce, a trader at TreasuryOne Ltd. in Johannesburg. “The dollar is taking a pounding and global markets are still on the hunt for yield. There’s not a lot of risk going now. South Africa seems like a good bet.”
The rand could appreciate to as low as 11.50 per dollar if Zuma is removed from office, Pearce said.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Latest posts by investing.com (see all)
- Forex – Dollar Drops as Sterling Shines on Brexit-Deal Optimism - October 19, 2018
- Euro May Take Lower Path Into ECB as Draghi to Maintain Rhetoric - October 19, 2018
- Forex – U.S. Dollar Falls as Euro, Bond Yields Rise - October 19, 2018