The rand advanced for the first time in three days after better-than-expected U.S. retail sales fueled investor appetite for riskier assets and helped boost demand for commodities. South Africa’s currency strengthened 0.4 percent to 8.7624 per dollar as of 11:35 a.m. in Johannesburg, paring a 1.6 percent decline in the previous two trading days. Yields on 6.75 percent bonds due 2021 dropped five basis points to 6.73 percent, the lowest in more than a week. U.S. retail sales jumped 1.1 percent in September, compared with the 0.8 percent increase forecast by economists, the Commerce Department said yesterday. Copper rebounded from a one- month low after Freeport-McMoRan Copper & Gold Inc., the biggest publicly-traded copper producer, said consumption in China is being sustained. Metals and other commodities account for 45 percent of South Africa’s exports, according to government data. “Global developments have turned more positive,� John Cairns and Josina Solomons, currency strategists at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “Commodities are taking direction from the broad rally in risky assets.� Emerging-market stocks gained, with the benchmark index rising to the highest level in more than a week. South Africa’s benchmark stock index rose for a second day to a record, led by Anglo American Plc, the diversified miner that makes up 8 percent of the index. The rand’s one-month implied volatility against the dollar declined 23 basis points to 16.77 percent, indicating that options traders see swings in the currency narrowing over coming weeks. The extra yield investors demand to hold South African dollar bonds rather than U.S. Treasuries narrowed 8 basis points to 179, compared with a two-point drop to 285 for the average of emerging-market debt. 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

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