Dec. 28 (Bloomberg) -- The rand strengthened for a fifth day against the dollar after Italy’s borrowing costs fell at an auction, easing concern Europe’s debt crisis may escalate and boosting demand for riskier, emerging-market assets.
South Africa’s currency appreciated as much as 0.5 percent, and traded 0.3 percent stronger at 8.1120 as of 3:20 p.m. in Johannesburg. Against the euro, it advanced 0.4 percent to 10.6048.
Italy today sold 9 billion euros ($11.8 billion) of six- month Treasury bills at half the yield it paid at an auction of the securities last month. Demand was 1.7 times the amount available for salee, compared with 1.47 times last month. The euro pared its decline against the dollar and European stocks advanced for a fourth day. South Africa’s benchmark stock index gained for a third day.
“The Italian auction went OK, and all Europe’s debt yields have fallen,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said by phone. “The euro-dollar is a bit higher, and that has pushed the dollar lower” against other currencies including the rand, he added.
South Africa’s 13.5 percent bonds due 2015 gained, cutting the yield six basis points, or 0.06 percentage point, to 6.76 percent.
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