S.Africa's Rand Climbs to 1-week High; Bonds Gain

South Africa's rand advanced to a one-week high against the dollar, breaking through resistance at 7.15, supported by a rise in U.S. stocks.

Government bonds also ended the week on a firmer note with further gains seen next week when feeble economic growth numbers for the second quarter are expected.

Stocks ended a volatile session flat with a firmer bias after U.S. Federal Reserve Ben Bernanke stopped short of signaling more action to boost economic growth.

After languishing in a 7.15 to 7.28 range for this week, the rand pierced resistance at 7.15 on Friday as U.S stocks rose after Bernanke's speech.

The rand hit a session high of 7.1290, its strongest since last week. It was the top performer on the day of emerging market currencies tracked by Reuters.

By 1550 GMT, it was trading at 7.13, 1.4 percent firmer than Thursday's New York close of 7.2325.

The rand tracked initial EUR/USD reactions, but we see a rebound in equities supporting the local unit at the end of the session, said Anisha Arora, emerging market analyst at 4CAST.

The rand has recovered from one-year lows of 7.50 hit two weeks ago, and a close below 7.15 would indicate further gains.

On fixed income, the yield on the 2015 bond fell 11 basis points to 6.595 percent, while the 2026 bond fell 15.5 basis points to 7.98 percent.

Bonds have regained some ground after higher than expected CPI and PPI inflation numbers this week.

The long end was sold far too aggressively this week after inflation data took away some hopes of a rate cut. So some guys are covering their shorts ahead of the weekend, Ashley Dickinson, bond dealer at Renaissance BJM adding that weak GDP numbers next week would be a further boost.

The market is expecting economic growth to have slowed sharply to 1.6 percent quarter-on-quarter compared with 4.8 percent in the first quarter.

Such a reading would support calls for further monetary loosening, to add to 650 basis points worth of interest rate reductions from late 2008 to late 2010.

The JSE Top-40 blue-chip index inched up 0.3 percent to 26,200.73 and the broader All-share index edged up 0.26 percent to 29,425.05.

There were expectations of economic stimulus from Bernanke, but investors were disappointed that it wasn't announced, Martin Lentsoane, a trader NEWS Trading said.

Among equity movers on the bourse, Optimum Coal rose 5 percent to 31.50 rand on news that Glencore plans to buy the coal miner.

Naspers gained 2.41 percent to 337.45 rand, after the media company said internet valuations had become inflated for acquisitions and that it would instead focus on organic growth.

African Bank added 1.93 percent to 32.71 rand after the mass market lender said it hoped to tap international bond markets in the next two years.