UPDATE 1-South African rand recovers after slipping to two-month low, stocks rise

  • Reuters
  • Forex News
UPDATE 1-South African rand recovers after slipping to two-month low, stocks rise
Credit: © Reuters.

(Updates rand, bonds, adds stocks)

JOHANNESBURG, Aug 5 (Reuters) - South Africa's rand recovered on Wednesday from a two-month low set the previous session, thanks to a weaker dollar, while stocks jumped to a more than five-week high led by gold miners.

At 1505 GMT the rand ZAR=D3 was 0.6% firmer at 17.2650 per dollar, after falling on Tuesday to 17.5350, its lowest since early June.

"It is shaping up to be yet another rough and rocky trading week for the battered dollar as investors attack the currency at any given opportunity," Lukman Otunuga, senior research analyst at FXTM wrote in a note.

"With the dollar falling victim to crumbling U.S. yields, uncertainty over the latest coronavirus relief package and shaky economic fundamentals, emerging market currencies like the rand have the potential to appreciate," Otunuga wrote.

On the stock market, shares were led higher by gold miners .JGLDX as bullion burst above historic resistance of $2,000 per ounce, with investors seeking a safe store of value. GOL/

Leading the climbers, Harmony Gold HARJ.J rose 9.61% to 124.95 rand, followed by DRDGOLD DRDJ.J , up 7.99% to 28.38 rand, while Gold Fields GFIJ.J climbed 7.78% after it said booming gold prices could drive up half-year profits by more than 300%. mining index .JMINI was up 4.87%.

"Loose monetary and fiscal policies around the world have been supportive to most mined commodities," Bank of America (NYSE: BAC ) Commodity Strategist Michael Widmer said in a note.

"Continued fiscal spending as governments are mending the damage from COVID-19, backstopped by central banks, means that interest rates will remain low, at the same time as the economy reflates."

The Johannesburg All-Share index .JALSH rose 2.45% to 57,629 points, a level last hit on Feb.25, while the Top-40 index .JTOPI rose 2.56% to 53,279 points.

In fixed income, the yield on the benchmark government bond due in 2030 ZAR2030= was down a single basis point to 9.325%.

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