JOHANNESBURG – South Africa’s rand rallied more than one percent on Friday to a new one month high with momentum reignited by a subdued jobs report from the United States that dragged down the dollar.
At 1515 GMT the rand was 1.06% firmer at 14.7275 per dollar, its best since Aug. 2, from an overnight close of 14.8850.
The greenback slipped to near a one-week low as a mixed report on the U.S. jobs market in August reinforced the view of a slowing expansion and the possibility of more interest rate cuts from the Federal Reserve.
Friday’s session brought the rand’s gains to more than 3.5% for the week, most of which came after Tuesday’s much better-than-expected second quarter gross domestic product figures.
In the three months to June, Africa’s most industrialised economy expanded by 3.1%, after a 3.1% contraction in the first quarter. Economists polled by Reuters had predicted an expansion of 2.4% for the quarter.
Thawing tensions in the ongoing trade spat between China and the U.S. this week have also boosted the rand. Top negotiators from both countries will meet in early October in Washington.
Stocks strengthened amid improved global markets sentiment with local banking and retail shares benefiting from a firmer rand.
In equities, the broader All-Share index rose 0.2% to 55,591 points, while the blue chips Top-40 index also gained 0.2% to49,673 points.
“Retailers and the banks are specifically responding to a firmer rand,” said trader at GT247 Nilan Morar adding that firmer internationally markets have also boosted sentiment.
The banking sector gained 1.1% while the general retailers tracker rose 1%.
Capitec was up 2.47% to 1.200 rand after Thursday’s trading statement showed headline earnings rose in the six-month to August. FirstRand closed up 1.8% at 62.09 rand.
Among the decliners, petrochemicals company Sasol’s closed 4% lower at 260.03 rand after the firm again delayed the release of the 2019 financial results.
“Sasol is having a real problematic time people don’t like stories about delayed earnings and releases,” said Morar. – Reuters Africa