Rand spurred to 2014 high
The local currency strengthened to its highest level this year against the dollar on Tuesday.
JOHANNESBURG - The rand strengthened to the its highest this year against the dollar on Tuesday, after breaking through a technical level and as credit rating agency Moody's said the recent election result was positive for investors.
The local currency broke through the important technical level of 10,30/32, sending it all the way to 10,2725, a level last seen on 18 December. By 1526 GMT it was trading 0,3 percent firmer at 10,3280, from a close of 10,3610 in New York on Monday.
Dealers said this puts the December 18 high of 10,2200 on the table for the currency, with the current 10,27 area not a firm barrier.
Sentiment was also helped after Moody's said the African National Congress's decisive majority win at last week's election was positive.
"Our key takeaway from this election is that macroeconomic policy continuity is now more assured, a credit positive," Moody's said.
Yields on government bonds gave up 7 basis points to 8,095 percent on the 2026 issue and 5 basis points to 6,535 percent on the 2015 note.
Earlier, Statistics South Africa released mining data for March, showing mining output had its biggest contraction since June 2013.
Analysts said the data reflected the negative impact of a four-month work stoppage in the platinum mines, where some miners look to be gradually heading back to work.
"Disruptions to platinum production will linger for some time after the strike officially ends. This suggests that the effects of the platinum sector strike are likely to weigh on the performance of mining production throughout the first half of the year," said Kamilla Kaplan, economist at Investec.