Rand powers to new five-month high

At one point, the local currency breached 14.00 to the dollar on Friday, the first time since July.

Picture: Eyewitness News

JOHANNESBURG - The rand has risen to a new five-month high, as investors globally looked to take on risk, targeting emerging markets for their higher yields.

At one point, the local currency breached 14.00 to the dollar on Friday, the first time since July.

The rand has gained about 5% since mid-December.

Traders say this is despite a raft of data releases showing a weak economy and nationwide blackouts.

Many agree that investors are willing to overlook the negatives and pocket the high yield.

Added to this, analysts see a further pick up in risk appetite early next year, especially with the US Central Bank set to keep lending rates flat or lower them further.

A stronger rand is good news as the Reserve Bank has been concerned about a volatile currency.

There is consensus that this, together with improved inflation, could see the bank drop interest rates in the new year.