UPDATE 1-Rand strengthens on global risk demand, stocks up

  • Reuters
  • Forex News
UPDATE 1-Rand strengthens on global risk demand, stocks up
Credit: © Reuters.

(Adds latest figures, analyst quotes)

JOHANNESBURG, Dec 7 (Reuters) - South Africa's rand strengthened on Monday, resuming a recent rally that has pushed it to pre-pandemic levels, with investors lured back into risk assets by progress in COVID-19 vaccines and hopes of further stimulus in the United States.

At 1600 GMT the rand ZAR=D3 was 0.67% firmer at 15.1250 per dollar, its strongest since Nov. 26, from an opening level of 15.2150.

The rand has gained around 6% against the U.S. currency since the start of November, supported by an uptick in global risk appetite that has largely outweighed investors' worries about South Africa's dire economic situation.

Third quarter growth data ZAGDP=ECI due on Tuesday could give them another reminder of South Africa's condition, and some analysts asked how much room there was left for further strengthening.

"Indications at this time are that the majority of market participants are already largely on the sidelines going into year-end," said Nedbank analysts in a note.

"While the rand remains relatively buoyant, it is likely to require a significant market catalyst to trigger a move sub the 15.0000 level."

Bonds firmed, with the yield on the benchmark 10-year government bond ZAR2030= down 4 basis point to 8.945%.

In the equities market, stocks extended a rally to hit a year high.

Anglo American (LON: AAL ) Platinum (Amplats) AMSJ.J led platinum mining stocks .JPLAT higher, offsetting losses in retail stocks .JGERE .

Amplats closed 4.67% firmer, after it raised its 2020 refined output guidance after rebuilding the Phase A unit of its Anglo Converter Plant (ACP) processing site ahead of schedule. Platinum IMPJ.J also rose, up 10.70% after the firm said it would buy back up to 1.6 billion rand ($105.95 million)of convertible bonds. Northam Platinum NHMJ.J climbed 5.70%.

Also boosting the Johannesburg All-share index, which closed 0.18% firmer at 59,527 points, were gold stocks .JGLDX . The local gold index rose 0.76%, tracking higher global prices. GOL/

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