Friday, October 16, 2009

South African Rand Climbs on Metallic Commodities


The South African currency witnessed a rally this week that set the rand to the highest rate versus the U.S. dollar after a decreased appeal for the U.S. currency combined with an increase in rates of metallic commodities provided support for the rand to outperform a number of currencies.

South Africa is today, the leading exporter of precious metallic commodities in the world, and as the gold is reaching record highs, platinum is climbing and other commodities are gaining value in markets, the rand is rallying significantly, also benefiting from a wave of risk appetite in stocks that brought investors to inject money in emergent markets and abandon previous dollar-priced positions, forcing the U.S. currency to the lowest levels in more than 12 months. South Africa remains one of the highest-yieldings investment options and its currency is one of the top winners among emergent market currencies, together with the Brazilian real.

South Africa is one of the emergent markets that has been benefiting from a new optimistic scenario which is forcing commodities up, attracting investors to yield and decreasing the appeal for the safety provided by the greenback, as the global slump is becoming a past event. The rand is likely to experience further gains towards the end of the year, specially versus the dollar.

USD/ZAR traded at 7.2680 as of 13:19 GMT from a previous closing price of 7.3430 yesterday.

This article taken by topforexnews.com.

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