Rand firms as US rate hike looks unlikely

Johannesburg - Government bonds climbed to their strongest in more than two months on Friday and the rand hovered near a three-week high, buoyed by signals that the US Federal Reserve could delay raising interest rates.

The blue-chip Top 40 futures index was up 0.9%, suggesting the actual index would open 419 points firmer at 09:00.

In fixed income, the yield on the benchmark note maturing in 2026 gave up 10 basis points in early trade, touching a low of 8.12% last reached on August 12.

It was last trading at 8.145%, down 7.5 basis points on the day.

The rand climbed to a session high of R13.2610/$, the strongest it has been since September 18, according to Thomson Reuters data.

By 10:30 the local currency was at R13.33, little changed from Thursday's close at R13.3030.

The greenback came under pressure after the latest Fed minutes increased doubts that the US central bank will raise interest rates this year.

"The rand has maintained a firmer bias this morning in line with stronger Asian equity markets and firmer commodity prices," Barclays Africa said in a market note.