Bloomberg News

Rand Gains, Paring Weekly Retreat, as US Jobs Data Boosts Metals

January 07, 2012

Jan. 6 (Bloomberg) -- The rand strengthened against the dollar for the first time in three days, paring its decline this week, after a fall in U.S. jobless rate to a three-year low fueled optimism the world’s biggest economy is recovering.

South Africa’s currency appreciated as much as 0.7 percent, and traded 0.6 percent stronger at 8.1203 per dollar as of 3:49 p.m. in Johannesburg. The rand has slipped 0.4 percent against the dollar this week, its first weekly decline in three. AngloGold Ashanti rose 0.67 percent, reversing its 1.8 percent drop yesterday.

Hiring in the U.S. may help fuel consumer spending, boosting demand for metals and other commodities, which account for as much as 60 percent of South Africa’s exports. The Standard & Poor’s GSCI Index of raw materials gained as the prices of metals including copper and platinum rose, boosting shares in South Africa’s mining companies.

“Lower unemployment in the U.S. is good for consumer spending, good for commodities, and good for South Africa,” Ian Cruickshanks, head of treasury strategic research at Johannesburg-based Nedbank Group Ltd., said by phone. “There is a general feel-good atmosphere, which takes the risk-on theme a bit further, and that is good for emerging markets and for the rand.”

U.S. employers added 200,000 jobs in December, double the revised 100,000 in November and more than the 155,000 median estimate of economist in a Bloomberg survey. The unemployment rate unexpectedly fell to 8.5 percent, the lowest since February 2009, labor department data showed.

South Africa’s 13.5 percent bonds due 2015 gained, driving the yield down two basis points, or 0.02 percentage point, to 6.85 percent. The yield has climbed 10 basis points this week.

--Editors: Ash Kumar, Gavin Serkin

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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