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26 Jun 2013 17:10
The rand pared on Wednesday as exporters converted earnings from abroad to the local currency. (Gallo)
“There were some inflows from local companies translating their foreign exchange earnings,” Edwin Smit, a derivatives trader at EDI (Pty) Ltd., said by phone from the capital Pretoria.
The rand gained as much as 0.8% to R10.0288 per dollar and was trading 0.4% stronger at R10.0676 as of 11:30 am in Johannesburg. The currency has lost 8.3% over the past three months, heading for its fifth quarterly decline in the worst stretch of declines since the final three month of 2001.
Yields on 10.5% government bonds due December 2026 fell for a second day, declining three basis points, or 0.03 percentage point, to 8.20%.
South Africa, the world’s largest miner of platinum, used as catalytic converters in vehicles, and the fifth-largest producer of gold, relies on raw materials for more than half of its foreign exchange earnings.
The continents’s largest economy ships about a third of its manufactured goods to countries that share the euro.
The spot price of gold declined for a third day, slumping as much as 3.6% as US economic data beat estimates, strengthening the case for reduced stimulus from the Federal Reserve.
South African forward-rate agreements are pricing in a more than 80% probability that the nation’s central bank will increase its benchmark interest rate before November, Rand Merchant Bank said in an e-mailed note to clients today. These contracts are used by investors to speculate on future rate movements.
The US, the world’s biggest economy, probably expanded by 2.4% in the three months through March, unchanged from the last quarter of 2012, according to the median estimate of 82 economists surveyed by Bloomberg.
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