JOHANNESBURG (Reuters) –Â South Africa’s rand firmed slightly against the dollar on Tuesday as global investors warmed to emerging markets, although its gains looked likely to be limited the day before a national election.
At 0624 GMT, the rand was at 10.5050 against the dollar, 0.38 percent firmer than last night’s New York close of 10.55.
“It is slowly grinding stronger. With all the recent scepticism around the pace of the world and U.S. economies, emerging markets in general are performing better than a month ago,” said Warrick Butler, a trader at Standard Bank.
The currency briefly touched a three-week high on Monday, helped by global demand for riskier assets but it later retreated due to poor economic data releases, including figures that showed South African unemployment increasing.
“It was not quite the kind of headline the ruling party would like to see given the proximity to the 2014 elections,” Butler said.
Despite sluggish economic growth and a slew of scandals under President Jacob Zuma, polls suggest the ruling African National Congress (ANC) will retain its near-two-thirds majority in parliament after the election, giving Zuma another five years in office.
Yields on government bonds were up 1.5 basis points to 6.750 percent on the 2015 note and 2 basis points to 8.415 percent on the 2026 issue.
