JOHANNESBURG (Reuters) -The South African rand weakened in afternoon trade on Friday, but was headed for a weekly gain against the U.S. dollar as the standoff between the West and Russia over Ukraine boosted appetite for key export gold.
At 1525 GMT, the rand traded at 15.0900 against the dollar, 0.47% weaker than its previous close but up 0.7% on its closing level last week.
“The rand had a strong rally this week and broke below the R15.00/$ mark as the physical demand in commodities and robust commodity prices support the currency,” Bianca Botes, director Citadel Global, said in a note.
Gold prices were set for a third straight weekly gain, even though prices retreated slightly from a key $1,900 level on Friday as a potential Russia-U.S. meeting cooled some nerves about an escalation in the Ukraine.
Also supporting rand assets this week, the South African Reserve Bank is expected to hike its main lending rate by another 25 basis points next month, extending a tightening cycle, a Reuters poll showed.
The government’s benchmark 2030 bond was slightly firmer, with the yield falling 0.5 basis point to 9.065%.
Shares on the Johannesburg Stock Exchange (JSE) posted a modest rise on Friday but ended the week with a loss of a few percentage points as continued tensions over the outcome of the Ukraine crisis and a volatile crude kept investors guessing on strategies to park funds.
The FTSE/JSE benchmark all-share index rose 0.28% to end at 76,368 points while the blue-chip index of top 40 companies ended up 0.35% to 69,650 points.
Even as markets have been volatile since the beginning of the year, South African banks, linked to the local economic environment and the mining companies have shown great resilience with their shares giving a healthy return of around 10%, worth investors predicting there is still room for growth.
(Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee;Editing by Andrew Cawthorne)
