BLBG:Rand Rebounds From Five-Week Low As Commodity Prices Rally
The rand gained, rebounding from a five-week low against the dollar, as commodity prices rallied on speculation that U.S. Federal Reserve Chairman Ben S. Bernanke may hint at more stimulus to revive economic growth.
South Africa’s currency advanced 0.3 percent to 8.4522 per dollar as of 9:44 a.m. in Johannesburg, paring its decline this month to 2.3 percent. The yield on 6.75 percent bonds due 2021 dropped three basis points, or 0.03 percentage point, to 6.70 percent.
Bernanke is due to deliver his annual speech on monetary policy at the central bank’s symposium in Jackson Hole, Wyoming, today. His address in 2010 preceded a second round of quantitative easing, boosting demand for higher-yielding assets including commodities and emerging-market bonds. Raw materials account for 45 percent of South Africa’s exports, according to government data for 2011.
“At the very least, we can hope for hints that the door is still open” for stimulus, John Cairns and Josina Solomons, currency strategists at Rand Merchant Bank in Johannesburg, wrote in e-mailed comments. “Our call for a strong rand by year-end is premised on things going well.”
The Standard & Poor’s GSCI Index of raw materials advanced as the prices of metals including copper and nickel rose. South Africa’s benchmark stock index gained for the first time in four days, led by commodity producers including BHP Billiton Ltd. and Sasol Ltd.
To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net
To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net
