Bloomberg News

Rand Gains as Retail Sales Beat Analysts’ Estimates, Metals Rise

February 15, 2012

Feb. 15 (Bloomberg) -- The rand advanced for a second day this week against the dollar after retail sales in Africa’s biggest economy beat analysts’ estimates and as China’s pledge to help resolve Europe’s debt crisis boosted commodity prices.

South Africa’s currency appreciated as much as 0.7 percent and traded 0.5 percent stronger at 7.6840 as of 2:40 p.m. in Johannesburg. It gained 0.4 percent to 10.1029 against the euro.

Retail sales rose at the fastest pace in eight months in December as interest rates at the lowest level in more than 30 years helped boost spending. Sales climbed 8.7 percent compared with a revised 7.2 percent a month earlier, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 11 economists was 6.5 percent.

“Today’s retail sales data is positive for the local currency from a gross domestic product differential perspective,” Thabi Leoka, head of macroeconomic research for South Africa at Standard Bank, said in e-mailed comments.

China will participate in resolving Europe’s debt crisis and is ready to be more involved in resolving the crisis through the EFSF and European Stability Mechanism, People’s Bank of China Governor Zhou Xiaochuan said in Beijing today. The Standard & Poor’s GSCI Index of raw materials surged to a six- month high.

Xiaochuan’s “comments have boosted sentiment with Asian markets up strongly and commodity currencies also benefiting,” Nomvuyo Guma, an analyst at Standard Bank Group Ltd. in Johannesburg, said in an e-mailed note today.

Copper for three-month delivery climbed as much as 1.2 percent. Zinc also rose. Commodities, including metals, account for 64 percent of South Africa’s exports, according to government data.

South Africa’s 6.75 percent bonds due 2021 advanced, driving the yield two basis points, or 0.02 percentage point, lower to 7.81 percent.

--Editors: Ash Kumar, Peter Branton

To contact the reporter responsible for this story: Robert Brand in Cape Town at rbrand9@bloomberg.net Stephen Gunnion at sgunnion@bloomberg.net

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


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