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#RandReport: Rand firms, stocks lifted by commodity rally

By 1615 GMT, the rand had strengthened 1.8 percent to 15.3555 per dollar.

South African rand. Picture: Christa Eybers/EWN
Rand,SA rand vs US dollar,dollar
Business Local

JOHANNESBURG - The rand rose to its highest in more than a week against the US dollar on Friday, shrugging off a jump in US employment, while stocks climbed to a new three-month high, spurred by a global commodities rally, particularly in metals.

By 1615 GMT, the rand had strengthened 1.8 percent to 15.3555 per dollar, bringing gains for the week close to five percent as the greenback's post non-farm payrolls rally faded.

Bonds inched up, with the yield on the benchmark 2026 issue shedding one basis point to 9.295 percent.

"The latest employment data coupled with improvements in a range of other macro-economic variables during the past couple of weeks will help to ease earlier concerns about a softening of US economic activity," said Stanlib chief economist Kevin Lings.

US nonfarm payrolls increased by 242,000 jobs last month.

But a drop in wages in February overshadowed the strong jobs growth, supporting views the Federal Reserve was in no hurry to hike interest rates and providing emerging currencies such as the rand some breathing space.

This week's global commodities rally lifted South African stocks to fresh three-month highs, as investors returned to a sector they have been shunning over concerns about slowing demand in China, the world's top consumer of resources.

Lonmin led the way again, extending its massive gains of the previous session with an 18 percent surge to a three-month high of R32.73.

Its rally was triggered by news the embattled platinum producer managed to reduce its headcount by more than 5,000 without sparking expected union resistance.

Gold shares maintained their strong run - bucking the general downturn in commodities this year - fuelled by the combination of a rising spot dollar price and a generally weak domestic currency, which pushes up bullion's rand price.

AngloGold Ashanti, which will return to the Top-40 index this quarter and coveted blue chip status after being relegated last year, shot up over 8 percent to R218.75, its highest level in three years, bringing its gains for the year to over 100 percent.

"The gold companies have all the planets in their favour for a change," said fund manager at Cadiz Corporate Solutions Peter Major.

Johannesburg's benchmark Top-40 index rose 0.61 percent on the day to 46,224.71 while the wider All-share index sprang 0.8 percent higher to 52,200.71.

Momentum indicators tracked by chartists suggest the All-Share had strayed into overbought territory, a signal that gains would be capped next week.

Around 289 million shares changed hands, average turnover on Africa's biggest stock exchange.

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