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Johannesburg - The rand extended gains against the dollar on Wednesday, scaling its strongest level since early December, partly driven by positive sentiment towards emerging markets, while stock emulated the upward movement.
The rand climbed more than 1% to R14.5350 per dollar in the session, the firmest it has been since December 9 last year, according to Thomson Reuters data.
The currency of Africa's most industrialised economy was last at these levels hours before President Jacob Zuma fired Finance Minister Nhlanhla Nene, shocking markets and triggering a financial markets turmoil that sent the rand falling through a series of lows.
By 15:25 GMT, the rand traded 0.99% stronger at R14.5580.
"There's a general shift back into a slightly high yielding, slightly riskier assets like the rand," Bidvest Bank chief dealer Ion de Vleeschauwer said.
The currency's rise was sparked by data showing that retail sales rose 4.1% year-on-year in February from a revised 3.6% in January. This compared with a median consensus of 2.6% reached by analysts in a Reuters poll.
The rand was also helped by a weaker dollar, which came under pressure after United States retail sales data unexpectedly fell in March as households cut back on purchases of automobiles and other items.
"We saw it initially strengthen when our data came out and then it pulled back a little bit more, and then with the U.S. data coming out, it moved below R14.60," said ETM Analytics economist, Ricardo da Camara.
On the bourse, stocks leapt to three-week highs also buoyed by a risk-on trading environment after Chinese trade data eased concerns of economic growth in the world's largest consumer of commodities.
The benchmark Top-40 index rose 1.89% to 46 617 points while the All-Share index added 1.69% to 52 938 points.
"There has been a lot of concern around China and its growth, particularly at the beginning of the year so it does look like the economy is stabilising," said Avior Capital Markets trader Rabi Thithi.
Among the gainers were diversified mining Anglo American, which was up 9.22% at R143.75, it's highest level this year. BHP Billiton rose 7.43% at R181.11, while Kumba Iron Ore gained 7.01% at R109.15.
Trading was robust, with a total of 313 million shares changing hands compared with last year's daily average of 280 million.
Government bonds followed the upward trend in South African assets, with the yield for benchmark 2026 debt down 1 basis point to 8.98%, after falling as much as 11.5 basis points earlier in the session.
