ANGGOLD: 16,961 -623 (-3.54%)
South Africa's rand rallies on U.S. rate cut bets, stocks follow
* Rand reaches best since mid-December
(Adds latest prices, analyst comments)
JOHANNESBURG, Jan 4 (Reuters) - South Africa's rand firmed
to a two-week best on Friday as emerging markets were boosted by
increased expectations of the U.S. central bank cutting lending
rates this year.
At 1430 GMT the rand was 0.84 percent firmer at
14.1550 after an overnight close of 14.3075.
"What we're seeing is how a recalibration in the Fed's
policy guidance is going to affect emerging market currencies
going forward," said Halen Bothma of ETM Analytics.
Traders of contracts tied to the Federal Reserve's policy
rate kept bets the U.S. central bank will not deliver a single
rate hike this year and will begin cutting rates next
With little on the local data front in the first week of the
new year, the rand has looked to offshore events for direction,
and has seen volatile trade with swings in the dollar setting
The rand reached a session best of 14.0925 soon after
trading in London kicked off before some of the momentum after a
surge in U.S. job growth helped steady the greenback,
which traded 0.15 percent higher after a rocky start.
Survey data on Thursday showed U.S. factory activity slowed
more than expected, the latest sign the world's largest economy
was losing steam, igniting bets the Federal Reserve could switch
from raising to cutting rates.
That aided the rand recovery from Wednesday's "flash crash"
that saw the unit plunge to a three-month low in a global
"Events in the U.S. will remain a determining factor for the
rand, contributing to the ongoing capriciousness of the local
exchange rate," said Annabel Bishop, senior economist at
Bonds were firmer, with yield on the benchmark paper due in
2026 down 5 basis points to 8.8 percent, its lowest
Stocks also continued to regain some of the losses they had
endured in the first few days of the new year, with the
Johannesburg Stock Exchange's top-40 index up 0.96 percent to
46,059 points and the broader all-share index up 0.82 percent to
52,093 by 1511 GMT.
Consumer-focused sectors, namely retailers and banks, led
the top-40 index upwards, with Truworths, The Foschini
Group and Mr Price at the top, as well as
bourse heavyweight Naspers, which was up 2.3 percent.
Anglogold Ashanti, meanwhile, was the worst
performer on the index, down 4 percent, after benefiting from
rising gold prices as investors retreated to safer assets
earlier in the week.
(Reporting by Mfuneko Toyana and Emma Rumney
Editing by Joe Brock/Mark Heinrich)
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