Rand gains on slow US wage growth, stocks up

The rand firmed on Friday, ending the first week of the new quarter more than two percent firmer as slow wage growth in the United States helped maintain demand for emerging currencies.

Stocks gained on the back of a possible trade deal between the US and China.

At 1530 GMT the rand was 0.32% firmer at R14.06 per dollar from R14.11 on Thursday.

The currency rallied as far as R14.02, its best since February 28, shortly after employment data from the US showed that while jobs increased by 196,000 wage growth had slowed, pushing the dollar lower.

Signs of progress in trade talks between China and the US has bolstered demand for emerging market currencies in general but the main boost for South African assets this week came from Moody’s holding the country’s sovereign rating at investment grade.

The rand’s run towards R14.00 could unlock further gains, analysts said, with the cluster of stop-loss triggers around the level adding momentum to the rally before an expected spike in volatility as May 8 national elections approach.

A Reuters poll taken this week found the rand is likely to remain steady at R14.30 over the next six months.

In equities, the Johannesburg All-Share index gained by the 0.11% to 57,776 points, while the Top 40 index rose 0.13% to 51,518 points.

“For the most part, resources led the charge on the way up today. All of the gold staples were up. We’ve seen the market looking for quality at the moment, and the likes of Sibanye Gold were sharply up,” said Independent Securities trader Ryan Woods.

The gold index strengthened 1.41%, while the platinum basket gained rose by 1.22%.

Sibanye Gold advanced 2.51% to R16,35.

Anglo American Platinum climbed 0.9% to R795,06.

In fixed income, the benchmark 2026 government bond firmed, with the yield down 2.5 basis points to 8.51%.