JOHANNESBURG – South Africa’s rand gained over one percent on Monday as growing bets of a win for Hillary Clinton in the U.S. presidential election lifted emerging market currencies, while stocks tracked the currency firmer.
By 1530 GMT, the rand had strengthened 1.43 percent to 13.4100 per dollar, edging towards the previous week’s two- month high of 13.3150. This was spurred by a mix of local and overseas politics that analysts say could encourage further gains.
On Sunday, two days before the U.S. vote, the FBI said it stood by its earlier finding that no criminal charges were warranted against Clinton for using a private email server for government work.
“The rand could also react well if more pressure comes on President Zuma,” said the head of foreign exchange trading at Capilis Asset Managers, Giacomo Bonavera.
The unit gained 2 percent last Wednesday after a court ordered the release of a report on alleged influence peddling by close allies of President Jacob Zuma, triggering calls from protesters and opposition parties for the president to resign.
Zuma has denied the allegations.
Bonavera said the rand could break through technical resistance at 13.00 by the end of the week, and trade as firm as 12.50 against the greenback by the end of the year if the U.S. central bank hikes rates modestly at its December meeting.
Government bonds were also firmer, with the benchmark paper due in 2026 cutting 0.5 basis points to 8.68 percent.
On the bourse, the benchmark Top-40 index rose 1.42 percent to 43,842 points while the All-Share index gained 1.24 percent to 50,303 points.
The banking sector rose 2.94 percent led by Nedbank, which gained 3.29 percent to 227.50 rand, Standard Bank which strengthened 3.08 percent to 146.38 rand and FirstRand, which gained 3.63 percent to 49.64 rand.
“With the stronger rand, the banking sector and retailers are picking up a little bit,” BP Bernstein trader Vasili Tirasis said.
Gains were curbed with bullion miners slipping as spot gold fell 1.5 percent, with investors dumping the safe-haven metal in favour of high-risk, high-yield assets.
Sibanye Gold fell 5.13 percent to 37.36 rand, AngloGold Ashanti was down 6.53 percent to 180.32 rand and Gold Fields fell 2.46 percent to 55.20 rand.
Trading was slow, with a total of 166 million shares changing hands compared with last year’s daily average of is 296 million.