JOHANNESBURG: South Africa's rand raced to a new two and half month high on Thursday, riding a fresh wave of global demand for high-yielding assets as investors looked to move out of low yield positions in developed economies, while stock remained mostly unchanged.
By 1515 GMT the rand had gained 2.1 percent to 14.1800 per dollar, its firmest level since May 3, after an overnight close at 14.855 in New York, with more gains in the offing as the unit again tested crucial psychological levels.
Analysis showed the unit making another go at technical resistance around 14.2000, a level it last touched in April which if successfully breached could open the door for a rally to 13.90.
The rand gained early in the session on expectations of a rate cut by the Bank of England (BoE), and kept climbing despite the bank's surprise decision to leave rates unchanged as risk appetite buoyed emerging assets across the board.
The unit shrugged off a largely expected shrink in mining output, which fell 4.4 percent in May according to Statistics South Africa to a ninth consecutive decline.
On the bourse, the benchmark Top-40 index dipped 0.03 percent to 52,837 points while the All-Share index ticked up 0.04 percent to 52,837 points, with resources and financials leading the gainers.
South Africa's Kumba Iron Ore rose 5.95 percent to 133.50 rand following a better than expected trading announcement of a 23 percent increase in their first-half profit, due to deferred tax assets in the prior comparative period.
"It looks like their production costs are lower than diamonds so at current iron ore prices they are quite cash flush and on track to probably be fully de-geared by the end of the financial year," said Avior Capital Markets trader Rabi Thithi.
Among the blue-chip gainers were platinum producers Anglo American Platinum who strengthened 3.45 percent to 399.30 rand and mining company Anglo American who rose 3.07 percent to 160.11 rand.
Government bonds were also firmer, with the benchmark paper due in 2026 cutting 4.5 basis points to 8.675 percent.
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