JOHANNESBURG: South Africa's rand firmed more than 1-1/2 percent to a two-week high against the dollar as weak economic data from the U.S. suggested its economy continues to struggle.
High yielding emerging market currencies such as the rand tend to strengthen whenever U.S. data undermines the case for interest rates to rise in the world's biggest economy.
At 1520 GMT the rand had gained 1.53 percent to 11.880 per dollar, its firmest level since April 30, as the lukewarm retail and trade data from the U.S. poured water on bets of a rate hike there before the end of 2015.
"The dollar is weaker across the board after those retail and trade figures," said Jim Bryson, a currency trader with RMB.
While retail figures for April were unchanged, the report showed households reduced purchases of automobiles and other big-ticket items, suggesting the U.S. economy was struggling to rebound after barely growing in the first quarter.
"The rand's reacted very well, and it's quite stable at the crosses. From here we should start seeing support around the 11.8600 area," Bryson added.
Against the currencies of its major trading partners, the pound and the euro, the local unit was 1.12 percent and 0.1 percent firmer respectively.
U.S. import prices fell for a 10th straight month in April, the sign of benign inflation likely to encourage the Federal Reserve to delay raising interest rates.
Yields on government bonds were mixed as a global bonds sell-off sparked by worries over Greece paused. The benchmark instrument due in 2026 added 1 basis point on the day to 8.135 percent.
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