BS: Rand Set for Second Weekly Rise as Commodities Rally on China
The rand advanced, set for its second straight weekly gain, as a report signaled manufacturing may expand at a faster pace this month in China, the biggest buyer of South African raw materials.
South Africa’s currency climbed 0.2 percent to 8.6424 per dollar as of 9:27 a.m. in Johannesburg, matching its weekly gain. Yields on benchmark 10.5 percent bonds due December 2026 rose one basis point, or 0.01 percentage point, to 7.31 percent, for a decline of five basis points this week.
A preliminary purchasing managers’ index for China by HSBC Holdings Plc and Markit Economics showed a reading of 50.9, higher than a median estimate of 50.8 in a Bloomberg News survey. A figure above 50 indicates an expansion. The U.S. Federal Reserve said yesterday it will expand its bond buying program and keep interest rates low until unemployment falls, further boosting demand for commodities and riskier assets.
“The commitment by the Fed to persist with massive and more aggressive quantitative easing is bound to keep the dollar on the defensive,” Quinten Bertenshaw, a Johannesburg-based analyst at ETM Analytics, said in e-mailed comments. “The weaker rand bias may be restricted for now.”
The Standard & Poor’s GSCI Index of raw materials advanced as prices of metals including copper and platinum gained. Metals and other commodities account for 45 percent of South Africa’s exports, according to government data.
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
