South African rand firms as positive sentiment lures bulls

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JOHANNESBURG, Dec 27 (Reuters) – South Africa’s rand rallied
to its strongest in nine months on Wednesday, still riding the
wave of positive sentiment after Cyril Ramaphosa’s election as
the leader of the ruling African National Congress and a global
rise in resources prices.

South African Rand coins are seen in this photo illustration

At 1500 GMT the rand was 1.1 percent firmer at
12.37 to the dollar, against a close of 12.5075 in overnight
trading in New York.

Technical indicators pointed to a continued run of gains in
the currency as year-end approached, with 12.31 the next target
after the currency touched a nine-month peak of 12.3450 earlier
in the session.

The rand is now trading below its 200-day moving average, a
confirmation of the firmer price trend that is likely to spur
further buying as investors who were short on the rand look to
position for the bull rally.

Volumes were thin after holidays on Monday and Tuesday,
exaggerating moves in either direction. The currency lost ground
in the Asian and U.S. sessions before recovering, with trade
mainly at the 12.50 technical mark.

Commodity prices hit multi-year highs, though gold edged
slightly lower on day, as optimistic views on Chinese demand for
metals and higher oil prices aided resources-linked currencies.

The rand’s gains were also linked to a rise in the euro
because the European Union is South Africa’s largest trading
partner.

Bonds were flat, with the yield on the benchmark government
paper due in 2026 unchanged at 8.715 percent.

Stocks were mixed, with the benchmark Top-40 index closing
0.15 percent down at 51,986.69 while the wider All-share index
edged up by 0.07 percent to 58,844.01.

Precious metals producer Sibanye-Stillwater was the
biggest gainer, adding more than 6 percent, lifted by the
commodities rally.