The South African rand on Wednesday hurtled to its highest value in three months against the U.S. dollar, Bloomberg reports.
The monetary unit of the African continent's largest economic system gained as a consequence of strong bond sales in Portugal and Germany while manufacturing in the African nation exceeded analysts' estimates. One economist noted hesitancy regarding investing in riskier assets is likely to wane for currency futures.
"Some of the risk and liquidity barometers continue to improve, and as they improve so general levels of risk aversion will subside," states a Wednesday email penned by economist George Glynos with ETM Analytics of Johannesburg, according to Bloomberg. "All of this should lend a bullish tone to the rand."
The strong debt sales in Germany and Portugal also lent support to sentiment in confidence given both nations' circumstances. Germany hosts the euro zone's largest economy and spearheads economic policy regarding the sovereign debt crisis, which has prompted Portugal to receive international bailout aid.
The Wall Street Journal reports the aftermath of 10-year bunds in Germany on Wednesday prompted expenses for borrowing to stay at record lows.
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