JOHANNESBURG: South Africa's rand firmed against the dollar on Thursday, touching a four-week high as the greenback lost ground against a basket of currencies after unimpressive US labour data.
As the rand strengthened, investors sold off shares in local companies that earn the bulk of their revenues in hard currency -- or rand hedge shares -- amid thin trading volumes, dragging the index lower.
Higher platinum and gold prices also offered support to the rand, NKC African Economics said in a note. At 1538 GMT, the rand traded at 13.5400 per dollar, 0.62 percent firmer than its close in New York trading on Wednesday. Earlier on Thursday it hit a four-week high of 13.4950 before easing back.
"Rand hedges for the most part have weakened during the course of the day," said Independent Securities trader Ryan Woods.
Gold touched its highest level in four weeks on Thursday as the dollar weakened, while platinum was near 8-week highs. The dollar index, a measure of the greenback against six world currencies, fell 1.09 percent to 101.580.
Meanwhile, South African sovereign bonds firmed alongside the currency, and the yield for the benchmark instrument due in 2026 dipped 6.5 basis points to 8.86 percent.
On the bourse, the benchmark Top-40 index fell 0.64 percent to 43,682 points while the All-Share index dropped 0.56 percent to 50,475 points. The volume traded was about 162 million shares.
British American Tobacco slipped 0.29 percent to 768.25 rand per share and Richemont fell 0.41 percent to 87.89 rand.
Further index losses were curbed by the resources sector that benefited from the higher platinum and gold prices boosting local miners.
Lonmin Plc surged 8.69 percent to 29.90 rand and Harmony Gold rose 4.59 percent to 33.02 rand.
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