* China GDP news boosts commodity currencies
* Euro zone woes will cap significant rand gains
JOHANNESBURG, July 13 (Reuters) – The rand regained its
footing against the dollar on Friday, cheered by data that
pointed to a soft landing for China’s economy, although euro
zone debt worries should keep gains in check.
Government bond prices held strong, still buoyed by demand
from foreign accounts in search of yield.
Yields hovered close to recent record lows, with the 3-year
and 14-year benchmarks each shedding three
basis points on the day to 5.825 percent and 7.665 percent
respectively.
After falling as much as 1.6 percent the previous day, the
rand traded at 8.3040 to the greenback by 0630 GMT, up
0.25 percent from Thursday’s 8.3250 close.
It tracked other commodity currencies, such as the
Australian dollar, which rallied on data showing China’s economy
grew in line with expectations in the second quarter, bringing
relief after market fears of softer growth.
“From South Africa’s point of view, the fact that the
Chinese authorities have already started to loosen monetary
policy and have the ability to support their economy through
fiscal measures is good news,” said Tradition Analytics.
“Whether this is a reason to turn bullish on the rand is
however debatable. Offshore developments remain sobering with
very few signs of outright improvement anywhere.”
The rand remains vulnerable to risk aversion, mainly linked
to worries of contagion from the debt problems that some
countries in the euro zone — South Africa’s main trading
partner bloc — are grappling with.
(Reporting by Stella Mapenzauswa; editing by David Dolan)
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