S.Africa’s rand edges up, stocks seen up

South Africa’s rand edged higher in early trade on Monday, buoyed by stronger gold prices and as rising global shares pointed to renewed investor appetite for risk, which should also help lift local stocks.

Asian stocks rose as investors looked past the U.S.’s Federal Reserve’s discount rate hike to signs of strength in the U.S. economy, while the euro, the currency of South Africa’s main trading partner, firmed on hopes of a quick bailout for debt-stricken Greece.

A pause in the dollar’s rally lifted gold, a key South African export, to its highest level in a month, which should support Johannesburg’s resource-heavy bourse.

The blue chip Top-40 March futures contract was up 1.5 percent at 0640 GMT ahead of the JSE Securities Exchange’s start at 0700 GMT.

The rand was trading at 7.6410 against the dollar, 0.3 percent stronger than its previous close in New York.

Analysts said stock market gains also helped boost the rand, although it was likely to keep to a 7.58 to 7.75 range for the session.

“Asian markets are up across the board this morning and there is talk of a bit of risk appetite from Japan,” Russell Lamberti of market analysts ETM, said.

Government bonds also gained slightly as investors look ahead to a busy week of data, including economic growth numbers for the fourth quarter on Tuesday and consumer inflation data on Wednesday.

Analysts are expecting the economy to show further recovery from recession and for targeted inflation to stay outside the top end of teh central bank’s 3 to 6 percent band for a second month in a row.

The yield, which moves inversely to the price, on the 2015 bond was 1 basis points lower for the session at 8.255 percent while the 2036 yield fell 0.5 basis points to 9.11 percent.

Reuters.