June 14 (Bloomberg) -- The rand appreciated the most against the dollar in a week as commodity prices and stocks rallied after data showed China’s economy is still growing.
The rand strengthened as much as 1 percent to 6.722 per dollar, the largest intraday gain since June 3, and traded 0.7 percent stronger at 6.7572 by 5:23 p.m. in Johannesburg. The currency of Africa’s biggest economy slipped 0.2 percent to 9.7862 per euro. South Africa’s FTSE/JSE Africa All-Share index gained for a second day, rising 0.2 percent, led by mining companies including BHP Billiton Ltd. and Anglo American Plc.
The MSCI Emerging Markets Index snapped a four-day losing streak and the Standard & Poor’s GSCI index of 24 raw materials rose for the first day in three after China’s industrial production rose more than expected. China is the biggest buyer of South African commodities, including coal and iron ore.
“Markets have been buoyed this morning by better-than- expected industrial production data out of China, which has also revived commodity prices,” Michael Keenan, a Johannesburg-based analyst at Standard Bank Group Ltd., said in a research note. “The rand could continue to ride the wave of positive global sentiment,” he wrote, without providing an estimate.
The rand kept its gains after Reserve Bank Governor Gill Marcus said the central bank will continue to accumulate foreign-currency reserves even after it posted a loss for the second consecutive year. The central bank doesn’t target a specific level for the rand, she told reporters in Pretoria.
Government bonds declined for a fifth day, driving yields to their highest level in almost three weeks, on concern rising commodity prices will fuel inflation. Risks to South Africa’s inflation rate are “on the upside”, Marcus said.
“Global commodity price increases have begun to pose risks to the domestic inflation outlook,” Marcus said. “This is expected to create a challenge for monetary policy going forward.”
The 10.5 percent notes due 2026 fell 63 cents to 116.36 rand, driving the yield up seven basis points, or 0.07 percentage point, to 8.57 percent, the highest since May 18, according to data compiled by Bloomberg. The 6.25 percent securities due 2036 slipped 54 cents to 74.55 rand, boosting the yield seven basis points to 8.79 percent.
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