MN: Rand heads for fourth week of gains as stocks rise
South Africa’s rand strengthened for a fourth week against the dollar as investors continued their hunt for better returns in high-yielding emerging markets.
The rand was also set for a fourth weekly advance against Britain’s pound, the longest stretch since the four weeks to April 10, and poised for the biggest gain against sterling since the first week of July. South Africa’s currency is also in its fourth weekly gain against the euro. The rand is the best performer against the dollar among emerging markets this week behind the Colombian and Mexican pesos.
The UK vote to quit the European Union has bolstered expectations that the US Federal Reserve will delay raising interest rates, as policymakers globally try to stem fall out from Britain’s decision. A gauge of emerging-market currencies headed for its third week of advances as dovish central bank policy from Japan to the Bank of England encourages investors to look toward riskier but higher-yielding emerging markets such as South Africa.
By 10:09am in Johannesburg, the rand was 0.3% stronger against the dollar, taking the week’s gain to 2.1% and making the currency the second-best performer in the world this year. At 11:43am it was trading at 13.44 to the greenback. While government bonds retreated after four days of gains, they are still set to rise for a third week. South Africa’s benchmark stock index gained 1% to the highest since August 2 and was set for the first weekly gain in four.
