In South Africa Rand firms as U.S. data soothes risk aversion

By 0650 GMT that rand had gained 0.29 percent to 15.5585 per dollar, pushing past technical resistance around 15.6500 and opening the door for further gains before Friday's ratings decision by Standard & Poor's.

  • Published:
A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo play A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo
24/7 Live - Subscribe to the Pulse Newsletter!

South Africa's rand firmed for a third consecutive session against the dollar on Thursday as global investors became less adverse to risk after U.S. data cooled expectations of an interest rate hike by the Federal Reserve.

By 0650 GMT that rand had gained 0.29 percent to 15.5585 per dollar, pushing past technical resistance around 15.6500 and opening the door for further gains before Friday's ratings decision by Standard & Poor's.

Data on Wednesday showed that U.S. factories appeared to be taking in fewer deliveries from their suppliers, which could hamper production in the months ahead and dampen the Fed's appetite for rate hikes in June and July.

"Yesterday's session has neither confirmed or denied the seemingly bullish sentiment in the market. Today's close will be used as a gauge going forward," said analysts at research firm 4Cast in a note.

The next technical milestone for the rand was around 15.4850, the analysts said.

Traders in South Africa said events abroad would remain in focus with the European Central Bank's policy meeting later in the session.

The rand reached an overnight high of 15.5420, shrugging off more signs that the South African economy was faltering after new vehicles sales in May plunged for the sixth month in a row.

Bonds tracked the currency firmer, with the benchmark issue due in 2026 cutting 1 basis point to 9.33 percent.

Stocks were set to open flat, with the JSE securities exchange's Top-40 futures index up only 0.06 percent from Wednesday's close.

Do you ever witness news or have a story that should be featured on Pulse Nigeria?
Submit your stories, pictures and videos to us now via WhatsApp: +2349055172167, Social Media @pulsenigeria247: #PulseEyewitness & DM or Email: eyewitness@pulse.ng. More information here.