JOHANNESBURG, Dec 30 (Reuters) - South Africa’s rand touched a five-month high early on Monday, as demand for emerging market currencies was aided by easing trade tensions between China and the United States and investors looking for high yields.
By 0620 GMT, the rand was 0.32% firmer at 13.9950 per dollar, compared with Friday’s close of 14.0400 in New York. The currency was at its strongest level since July 31, 2019.
China’s commerce ministry said on Sunday it has “proactively dealt with” trade frictions with the United States this year and that it is in close touch with the U.S. on signing the trade deal.
The rand has gained about 5% since mid-December, despite a raft of data releases showing a weak economy and nationwide blackouts by state power firm Eskom, with investors willing to overlook the negatives and pocket the high yield.
The rally has seen the unit hurdle key technical resistance points, first at 14.40 and then 14.20, spurring demand to the 14.00 psychological level that could trigger even more gains as investors look to close position and lock-in gains.
Bonds were flat, with the yield on the benchmark 2026 government issue up 0.5 basis points to 8.17%. (Reporting by Mfuneko Toyana; editing by Uttaresh.V)