“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. Durable goods orders in the world’s largest economy rose more than forecast in May, while consumer confidence for June exceeded projections, data showed yesterday.
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.