South Africa's rand rallied to its firmest in one week on Monday as sentiment toward emerging markets was lifted by positive signs from Chinese data, while stocks were mostly flat.
Rand firms on emerging markets rally, stocks flat
By 1600 GMT the rand had gained 1.9 percent to 14.6900 per dollar, outperforming fellow emerging currencies as it raced to a one-week high, just shy of the next key technical mark of 14.6000.
"It's effectively picking up from where it left off last week," an analyst at Rand Merchant BankGordon Kerr said, adding that a run through recent technical resistance around 14.6400 could see the currency extend gains.
If the rand failed to hold on to the gains, it would likely turn to upcoming economic data for momentum, Kerr said.
But with domestic retail and mining data only due later in the week, the rand took its cue from offshore developments, where hopes of further monetary stimulus by China after consumer and producer inflation there slowed boosted appetite for emerging assets.
The rand had also been helped by the market repricing its expectations of the U.S. Federal Reserve's interest rate trajectory, from about 4 rate hikes in 2016 to just 2, emerging markets analyst at 4CastRajiev Rajkumar said.
Bonds were also firmer, with the benchmark government paper due in 2026 cutting 5 basis points to 9.145 percent.
On the bourse, resource companies led the charge, with Anglo American Platinum and AngloGold Ashanti rising on the back increases in gold and platinum.
Gold hit a three-week high, as the continued ultra-low interest rates in the U.S. raised the appeal of safe-haven assets.
Shares in top producers Anglo American Platinum added 8.5 percent to 395 rand while AngloGold Ashanti increased by 5.89 percent to 226.90 rand.
On the downside, Oakbay Resources & Energy fell 16.67 percent to 20 rand. The firm said it would start talks with companies to try and re-establish ties after some banks severed links with it.
Last week, several South African companies, including two major banks, cut ties with Oakbay following allegations over the Gupta family's relationship with President Jacob Zuma.
The broader All-Share index inched up 0.01 percent to 51,428 points while the benchmark Top-40 index lost 0.1 percent to 45,206 points.
Trade volumes were low with about 217 million shares changing hands, according to preliminary bourse data, compared with last year's daily average of 290 million.
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