JOHANNESBURG, June 2 (Reuters) - The South African rand
rallied to its highest in more than two years against the dollar
on Wednesday, as investors cheered the latest evidence of a
sustained rebound in global economies and as U.S. Treasury
yields pulled back.
At 1525 GMT, the rand was 1.27% firmer at 13.5900
against the dollar, trading at its firmest since early February
With the local economy remaining weak and facing power cuts,
the rand's recent rally has been mainly on the back of global
factors, including higher commodity prices which benefit
resource-rich South Africa and expectations U.S. lending rates
will stay lower for longer.
Riskier currencies, such as the rand, thrive on U.S.
interest rates remaining low because they benefit from the
interest rate differential that increases their appeal for carry
Investors waited for crucial U.S. jobs data on Friday to
assess what the increasing evidence of a faster-than-expected
economic recovery would mean for central bank policy in the
"This figure could also give markets some short-term
guidance as to the economy in the U.S. which is likely to have a
systemic effect across financial markets," said DailyFX analyst
Stocks continued their upward movement with the main index
racing past its all-time peak seen in early May to hit a record
on Wednesday, as raging growth prospects in the U.S. boosted
industrials and financial stocks.
The FTSE/JSE all-share index ended up 0.18% at
69,049 points. The blue-chip index of top 40 companies,
often a gauge of the performance of the best of the listed
companies, was up 0.14% at 62,787 points.
"Positive manufacturing data from the U.S. is making
investors switch towards more of a risk-on sentiment and shows
they are not much concerned about inflation," said Thato
Mashigo, Portfolio Manager at Sanlam Private Wealth, adding that
this lends well to South African stocks.
He said favourable U.S. non-farm payroll data on Friday
could be critical for a continued bull.
Bonds were a touch firmer, with the yield on the 2030
government issue down 1.5 basis points at 8.89%.
(Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee;
Editing by Nick Macfie)