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Rand hits high after smooth poll

May 08 2014 20:51
Johannesburg - The rand rallied more than 1.2% against the dollar to its strongest in more than four months on Thursday, riding on general buoyancy in emerging markets and amid relief at a smooth national election.

The ruling ANC party swept toward victory in the poll, giving President Jacob Zuma the political muscle to push through pro-business reforms in the face of opposition from unions and leftists whose populist rhetoric has unsettled investors.

At 15:52 GMT, the rand was trading 1.29% firmer at R10.3205/$ the greenback, not far off its session high of R10.3200/$. The local unit last traded at these levels in late December.

Government bonds followed suit, with the yield for the 2026 benchmark sliding 20.5 basis points to 8.135%. The shorter-dated 2015 issue closed 15.5 basis points lower at 6.53%.

"In general, we have started to see a much better platform for risk trades unfold," ETM market analyst Sean McCalgan said.

The rand was largely unfazed by data showing growth in South Africa's manufacturing output slowed to 0.7% year-on-year in March from 1.5% in February, undermining the case for more interest rate hikes this year.

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