BLBG:Rand Gains For Third Day Versus Dollar on Speculation Currency Undervalued
The rand strengthened for a third day amid speculation that the worst emerging market currency slump this year has left the exchange rate undervalued.
“In the South African space we have seen such a massive sell-off, I think the market might be a bit oversold,” Brigid Taylor, head of institutional sales at Johannesburg-based Nedbank Capital, said by phone. “A lot of players in the local market not being around creates thin markets.”
The South African currency appreciated as much as 0.5 percent before paring its gains to 0.2 percent at 8.3839 as of 8:36 a.m. in Johannesburg, the best performer out of more than 20 emerging market currencies tracked by Bloomberg. The rand has slumped 21 percent this year.
South African bonds declined for the first time in three days, with the yield on 13.5 percent bonds due 2015 rising 1 basis points, or 0.011 percentage point, to 6.956 percent.
To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
