JOHANNESBURG: South Africa's rand firmed late on Tuesday as investors continued to push back bets of an interest rate hike in the United States, although gains were restrained ahead of local growth data and a ratings decision by Fitch. Stocks closed higher as the firmer currency boosted companies with predominantly local operations.
By 1540 GMT the rand had gained 0.1 percent to 14.8850 per dollar, stretching a rally that placed the unit on track for its sixth successive sessions of gains versus the greenback on its way to one-month highs.
The rand reached a session high of 14.7995 before retreating in relatively low volume trade, but remains below the 20-day moving average of 15.00, triggering technical strength for the currency towards the next resistance level around 14.7500.
Government bonds retreated, with the benchmark paper due in 2026 adding 4.5 basis points to 9.1 percent.
"Yesterday and today has basically been a continuation of flows of dollars into riskier assets," said chief currency trader at Capilis Asset Managers Giacomo Bonavera.
Analysts said a reassessment of the timing of a rate hike by the US Federal Reserve, now seen by investors coming later in the year rather than next week, was aiding the rand.
Ratings agency Fitch is due to announce its decision on South Africa's credit rating on Wednesday after S&P Global Ratings kept the country's debt at investment grade on Friday.
Growth figures are also due on Wednesday, with economists polled by Reuters predicting South Africa's GDP shrunk 0.1 percent in the first quarter following a 0.4 percent expansion in the previous quarter.
On the bourse the benchmark Top-40 index was 0.48 percent firmer at 48,053 points while the All-Share index was up 0.58 percent to 54,305 points.
Telkom extended gains into a fourth straight session, rallying 7.69 percent to a 7-month high of 70 rand, a day after reporting an annual profit. Traders said the firmer currency lifted the share prices of companies that earned the lion's share of their revenues in South Africa. Retailer Mr Price, which sells its no-frills clothing overwhelmingly in South Africa, was the best performing blue chip stock, rising 4 percent to 212 rand.
Trade was below par with around 232 million shares changing hands, compared with last year's daily average of 296 million, according to preliminary bourse data.
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