JOHANNESBURG (Reuters) - South Africa’s rand hit its strongest level against the dollar this year in Tuesday’s early trading session as positive momentum continued for riskier emerging market currencies.
At 0631 GMT, the rand hit 10.4645, its strongest level this year against the greenback and over half a percent stronger on the day, from Monday’s New York close of 10.5295.
“It is emerging markets strengthening really, it is a continuation of the trend, we were struggling to get through 10.50, but we have come in this morning and broken it,” said Jim Bryson, a rand trader from Rand Merchant Bank.
“Most emerging markets and other high-risk currencies are like the rand — pushing at the stronger-end of the recent range,” Rand Merchant Bank added in a note.
The currency continued gains spurred by U.S. jobs data that came in slightly below market expectations on Friday, which saw the rand break a three month high.
Investors will be watching the release of a local Chamber of Commerce and Industry (SACCCI) March business confidence index to gauge economic sentiment. The indictor rose in February despite subdued economic activity.
Government bonds also firmed with yields for the benchmark 2026 paper falling seven basis points to 8.31 percent and the 2015 note was down 4 basis points 6.695 percent.