The rand strengthened against the dollar on optimism a solution to the Greek crisis will be found, boosting investor appetite for riskier emerging-market assets. South Africa’s currency rose as much as 0.4 percent to 6.7411 per dollar, and traded 0.3 percent stronger at 6.7587 at 9:25 a.m. in Johannesburg. It declined 0.1 percent to 9.7111 versus the euro. Emerging-market stocks and commodity prices snapped four days of declines after Luxembourg’s Jean-Claude Juncker said yesterday Greek Prime Minister George Papandreou assured him the government would do everything to ensure financial aid before a confidence vote today. South Africa’s benchmark stock index rose as much as 0.5 percent. “The rand remains completely at the mercy of the euro- dollar and also today’s Greek parliament vote of confidence,” John Cairns and Nema Ramkhelawan, currency strategists at Rand Merchant Bank in Johannesburg, said in a research note. “If, as expected, the cabinet is approved, then both risky assets and the euro would be boosted, sending the dollar lower” versus the rand. The rand often moves in tandem the euro, with a statistical correlation of 0.82 over the past month. A value of 1 would mean they moved in lock step. The eurozone accounts for 45 percent of South Africa’s exports and 34 percent of its imports, according to South African Revenue Service data. News about Europe’s debt crisis will likely overshadow the release of current account data in South Africa today, analysts said. South Africa’s current-account widened to 2.8 percent of gross domestic product in the first quarter, from 0.6 percent the previous quarter, according to the median estimate of 17 analysts in a Bloomberg survey. The current-account data will be released at 10 a.m. in Pretoria. “Expect the focus to rest with movements in the euro- dollar and developments in Greece,” Tradition Analytics researchers led by Johannesburg-based Quinten Bertenshaw said in a research note. “The domestic data will only be market-moving should they deviate significantly from consensus.” Tradition sees the rand trading between 6.75 and 6.85 per dollar today. The rand maintained its gains after Monde Mnyande, chief economist at the Reserve Bank, said the currency’s strength had “soothed” the effect of oil and food prices on inflation. Bonds gained before a central bank auction of notes maturing in 2018 and 2021, driving yields to the lowest level in a week. The 6.75 percent securities due 2021 climbed 27 cents to 89.11 rand, driving the yield five basis points, or 0.05 percentage point, lower to 8.40 percent, the lowest since June 13. To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net To contact the editors responsible for this story: Gavin Serkin at gserkin@bloomberg.net.

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