UPDATE 1-South African rand rallies to 14-month high, stocks rise

  • Reuters
  • Forex News
UPDATE 1-South African rand rallies to 14-month high, stocks rise
Credit: © Reuters.

(Update rand, bonds; adds stocks)

JOHANNESBURG, April 14 (Reuters) - South Africa's rand rallied to its highest in more than 14 months on Wednesday, as improved risk appetite globally and positive local retail sales data supported demand for the currency.

At 1451 GMT the rand ZAR=D3 was 0.76% firmer at 14.3900 per dollar, trading at its strongest since Jan. 24, 2020.

Falling global bond yields helped lift emerging market currencies, with risk appetite denting demand for the dollar. South African rand appreciated against most G10 currencies today as the risk-on mood sweetened appetite for emerging market currencies," said FXTM senior research analyst Lukman Otunuga. "Buying sentiment towards the local currency was boosted by the encouraging retail sales report."

"Should the risk-on remain the name of the game for the rest of the trading week and the dollar extends losses, this may push the rand higher," he added.

South Africa's retail sales rose for the first time in 11 months in February, defying forecasts of another downturn as purchases of furniture, household appliances and food jumped. comes after data on Tuesday showed mining output rose in February, signalling the economy may have turned a corner in the first quarter after a sharp contraction last year. also firmed, with the yield on the benchmark 2030 government issue ZAR2030= dropping 13 basis points to 9.23%.

South African stocks rose on Wednesday for the second consecutive day after a sell-off on Monday as strong results from two of the biggest U.S. banks instilled hopes of a quicker recovery. in South African equities shrugged off concerns of inflation, which eats into the value of return on investments, took a backseat on the back of strong start to the U.S. earnings season, analysts said.

The benchmark index .JALSH ended up 1.1% to close the day at 67,812 points while the blue-chip index .JTOPI closed up 1.14% at 62,084 points.

However, local banks, whose shares often reflect prospects of domestic economic recovery, closed down with the bank index .JBANK down around 0.2% on concerns of a delay in the rollout in South Africa of Johnson & Johnson (NYSE: JNJ )'s JNJ.N COVID-19 vaccine.

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