Johannesburg - The rand rose as much as 2.5 percent against the dollar to its strongest in more than a week on Tuesday, buoyed by data that showed South Africa's economy bounced back between April and June after a rocky first quarter.
The local currency climbed to a session high of 14.0070 to the dollar, its firmest since August 26, and was trading 2.35 percent higher at 14.0420 by 16h50 GMT.
The bulk of its gains came after Statistics South Africa said the economy grew by 3.3 percent in the second quarter.
Government debt followed suit, with the yield for paper maturing in 10 years shedding 12.5 basis points to close at 8.725 percent.
Stocks ended mixed, with the benchmark Top-40 index down 0.15 percent at 47,008 points while the All-Share index inched up 0.11 percent to 53,680 points.
The stronger GDP data, coupled with recent data showing a trade surplus, has provided a reprieve for the rand, buffeted by worries that Finance Minister Pravin Gordhan could be charged over the activities of a unit set up when he was head of the tax department.
“The improvements observed in the terms of trade picture in recent months is probably the most encouraging aspect of today's GDP release and should bode in favour of narrowing the still elevated external account imbalances,” BNP Paribas Securities South Africa analyst Jeffrey Schultz said.
“This has the potential to provide some near-term respite for the rand which has recently been negatively impacted by unfortunate political uncertainty.”
On the bourse, shares in construction giant Wilson Bayly Holmes-Ovcon were the star performer, rising 3.55 percent to R159.46 after it reported a 23.8 percent rise in full-year profit.
The second quarter recovery in the economy helped retail stocks like Mr Price, which was up 2.14 percent to R166.50 and Clicks, which added 3 percent to R124.
REUTERS