Bloomberg News

Rand Hits 4-Month High as Stocks Rally on Manufacturing, Jobs

February 03, 2012

Feb. 2 (Bloomberg) -- The rand strengthened to a four-month high as stocks extended a rally after data showed an expansion in manufacturing across the globe and slowing unemployment in the U.S., boosting demand for riskier assets.

South Africa’s currency appreciated as much as 0.6 percent, a third day of gains, to 7.6443 per dollar, the strongest since Sept. 20. It traded less than 0.1 percent up from yesterday’s New York close at 7.6864 as of 3:44 p.m. in Johannesburg.

Claims for U.S. jobless benefits fell last week, a Labor Department report showed today, a sign the labor market is improving. U.S. manufacturing grew at the fastest pace since June, a report showed yesterday. The U.K.’s factory measure unexpectedly reached an eight-month high, and manufacturing gauges in South Africa, Europe, China and India rose in January.

The data showed that “the global economy entered 2012 on a much better footing,” John Cairns and Josina Solomons, analysts at Rand Merchant Bank in Johannesburg, wrote in e-mailed comments. “Risk-on is the result” and “the rand has responded with further gains,” they added.

A gauge of emerging-market stocks headed to its highest level since August, and South Africa’s benchmark stock index rose to a record. Raw materials exporters including Anglo American Plc and BHP Billiton Ltd. led the advance.

South Africa’s 6.75 percent bonds due 2021 gained for a third day, driving the yield down four basis points, or 0.04 percentage point, to 7.65 percent, the lowest since Sept. 9.

--Editors: Peter Branton, Linda Shen

To contact the reporter on this story: Robert Brand in Cape Town at

To contact the editor responsible for this story: Gavin Serkin at

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