Bloomberg News

Rand Gains First Time in Four Days as Metal Prices, Stocks Rally

February 20, 2012

Feb. 17 (Bloomberg) -- The rand strengthened for the first time in four days as signs of growth in the U.S. lifted commodity prices and optimism that Greece will get a bailout boosted demand for riskier, emerging-market assets.

South Africa’s currency appreciated 0.8 percent to 7.7232 per dollar as of 4:35 p.m. in Johannesburg, paring the week’s loss to 0.2 percent. It gained 0.4 percent to 10.1831 against the euro.

An index of commodity prices rose to a six-month high and global emerging-market stocks advanced after a report yesterday showed Americans filed the fewest claims for jobless benefits since 2008. European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the European Central Bank to plug a new financing gap in the second Greek bailout, two people familiar with the talks said.

“Some great U.S. data has broken the risk-off trend,” John Cairns and Josina Solomons, currency strategists at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “The markets are more positive this morning about Greece.”

Other reports this week indicated U.S. consumer confidence and housing starts climbed while manufacturing in the Philadelphia area accelerated, bolstering optimism demand may improve in the second-largest user of copper. A gauge of U.S. leading indicators probably advanced for a fourth month in January, economists said before a report today.

Copper for three-month delivery jumped as much as 1.5 percent today. Zinc, tin and nickel also rose. South Africa’s benchmark stock index gained for the first time in four days, led by raw materials exporters including Anglo American Plc and BHP Billiton Ltd.

Commodities, including metals, account for 64 percent of South Africa’s exports, according to government data. Europe is the country’s biggest trading partner.

The government’s 6.75 percent bonds due 2021 advanced for the first time in four days, driving the yield six basis points, or 0.06 percentage point, lower to 7.808 percent.

--Editors: Stephen Kirkland, Alex Nicholson

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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