The South African rand advanced today, before retreating a bit, as investors ramped up buying of the country’s bonds and on speculations that increasing demand for raw material will boost commodity currencies.
The Johannesburg Stock Exchange data showed that foreign buyers purchased a net 1.17 billion rand ($136 million) of South Africa’s bonds yesterday, while net purchases totaled 3.9 billion rand this year. Signs of increasing demand for raw materials from China, as well as some other countries, drove up currencies tied to performance of commodities, including the Australian one. The rand also joined the rally, but shed its gains later. The MSCI Emerging Markets Index advanced as much as 0.2 percent.
USD/ZAR rose from 8.5800 to 8.5891 as of 15:03 GMT today after falling to 8.5599.
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