JOHANNESBURG (Reuters) - South Africaâs rand and stocks clawed back some of the weekâs heavy losses on Friday, bolstered by firmer U.S. stocks that gained on hopes a bank rescue plan will be approved and another banking tie-up.
The rand had firmed 0.9 percent to 8.4420 against the dollar at 1535 GMT, also boosted by a recovery in the gold price, after slipping to a 5-1/2 year low of 8.5745 earlier in the day.
Analysts said a higher start on Wall Street, which rose despite a report showing that that economy shed the most jobs in more than 5 years may have tamed some of the risk aversion that has weighed on emerging markets this week.
The Dow Jones Industrial Average was up 2 percent in early trade as investors hoped U.S. lawmakers will approve a $700 billion package to rescue troubled banks, and after Wells Fargo agreed to buy embattled bank Wachovia Corp.
âIt looks very much like it (the rand) is taking its cue from what is happening in the U.S. equity markets,â George Glynos, managing director of market analysts ETM, said.
âThis week the rand has correlated quite well with Wall Street.â
The rand has lost almost 5 percent of its value against a rallying dollar this week, but has strengthened slightly against the euro.
The dollar continued its run against the European currency to a 13-month high, partly on expectations Euro interest rates will fall, although it later pared gains.
âPOSITIVE NOTEâ
Gold bounced off a two-week low, which together with the higher U.S. stocks helped lift Johannesburgâs blue-chip index off a two-year low.
The Top-40 index gained 0.59 percent to 20,523.64 points and the All-Share index was up 0.52 percent at 22,678.25 points.
Read full article: S.Africa rand, stocks boosted