#RandReport: Rand recoups losses as Gordhan fears subside
The unit has clawed back more than 3% in value against the greenback since sliding around 4% last Tuesday.
JOHANNESBURG - The rand rallied strongly to its firmest in one week on Tuesday as investors took a calmer view of charges brought against Finance Minister Pravin Gordhan.
Stocks rose in line with emerging markets, led by gains in the currency that benefited retail shares.
The rand was 1.6 percent firmer at 13.9100 per dollar by 1615 GMT, from an overnight close of 14.1400 in New York. It traded below the 14.00 technical barrier for the first time since 11 October as the diminishing likelihood that Gordhan would not be able to deliver his budget next week soothed sentiment toward the unit.
President Jacob Zuma said on Tuesday that he supported Gordhan, but that the law must take its course in the case against him. Gordhan is charged with irregularly re-hiring an employee as a consultant while he headed the revenue service six years ago
The unit has now clawed back more than 3 percent in value against the greenback since sliding around 4 percent last Tuesday when state prosecutors announced they were charging Gordhan with fraud.
"If you take out all the political noise, the rand is bang-on where it should trading. It's falling back into line with other emerging markets and the rally can push back into 13.90s" said chief currency dealer at Treasury One Wichard Cilliers.
Hints from a Federal Reserve official earlier in the session that a December rate hike may be off the table also lifted the rand, traders said.
Bonds also firmed, with the yield on benchmark paper due in 2026 shedding 4.5 basis points to 8.815 percent. Yields at a weekly auction of long-dated government instruments were also lower.
The benchmark Top-40 share index rose 0.66 percent to 44,543 points, while the All-Share index gained 0.7 percent to 51,126 points.
Retail shares continued to gain amid a broad-based rally sparked by a firmer rand, while bullion shares benefited as the spot gold price rose 0.45 percent.
"Retailers were looking for an excuse to bounce because they were coming off extremely oversold levels. Now with the rand strengthening over the last day or so, it's boosted them quite nicely today," said BP Bernstein trader Vasili Tirasis
Among the biggest blue-chip gainers were bullion miner Gold Fields which rose 3.88 percent to 59.94 rand, Shoprite Holdings Limited which gained 2.90 percent to 192.61 rand, and Mr Price Group which firmed 3.27 percent to 157.57 rand.