JOHANNESBURG (Reuters) – South Africa’s rand extended gains against a weaker dollar on Wednesday after U.S. midterm elections split Congress, lowering the chance of any major U.S. fiscal policy boost soon.
At 1140 GMT, the rand traded 1.4 percent stronger at 13.9200 per dollar, having earlier hit a session best of 13.8850, the firmest since August 10.
The dollar index was down 0.57 percent.
“The rand is leading the charge of the emerging market rally, as the dollar is on back foot since the midterm election results started coming in,” said ETM economist Halen Bothma.
Domestic data also helped the rand.
Business confidence rose for a second consecutive month in October, bolstered by higher import volumes, vehicle sales and retail sales, a survey by the South African Chamber of Commerce and Industry (SACCI) showed.
“After the release of the SACCI survey, which was at a six-month high, it provided the rand with fresh tail wind,” Bothma said.
The rand has been on the back foot since it was announced in September that the economy had entered a recession.
On Thursday, investors will be watching for mining (0930 GMT) and manufacturing (1100 GMT) data.
Bonds also firmed, with the yield on government’s 10-year paper down 7 basis points to 9.070 percent.
On the bourse, the all share index rose 0.91 percent to 54,947 points while the blue chip top 40 index was 0.85 percent higher at 48,548 points.
Clothing retailer Mr Price was up 4.22 percent to 247.33 rand, while Woolworths Holdings rose 3.23 percent to 54.91 rand.
“The market is doing much better after a cautious sell-off yesterday,” said analyst Ryan Woods.
“After the results of the U.S. midterm elections, we’re starting to see more market certainty.”
(Reporting by Nomvelo Chalumbira; Editing by Joe Brock)