* Rand follows stronger euro on renewed EU optimism
* Reduces year’s losses to 1.4 percent
* Bonds little changed in lacklustre session
JOHANNESBURG, June 29 (Reuters) – South Africa’s rand jumped
as much as 2.7 percent against the dollar on Friday, recording
it’s biggest daily gain since late November 2011 as renewed
optimism about a solution to Europe’s debt problems fired up
risk appetite.
The currency was among the strongest five in a basket of 20
emerging market currencies watched by Reuters, shrugging off
data showing South Africa’s trade deficit remained wide at 8.9
billion rand in May, pointing to continued pressure on the
current account.
The rand reached a session high of 8.1750 to the
greenback, the firmest it has been since June 20, and was 2.66
percent firmer at 8.1777 by 1534 GMT compared with Thursday’s
close.
The rand’s gains mirrored a rally in the euro, currency of
South Africa’s main trading partner bloc, which was on track for
its best day against the dollar in eight months after euro
zone leaders agreed on measures to stabilize banks and reduce
borrowing costs for Italy and Spain.
“The market responded very well to the overnight news on EU
debt crisis management. I think people are now expecting a bit
more in the way of positive outcomes from the EU summit this
weekend,” said Roderick Ngotho, EMEA FX strategist at RBS.
Continued…
