South Africa’s rand firmed last week and looked set for weekly gains, thanks to a rise in commodity prices and a weakening U.S. dollar as investors turned to riskier but high-yielding assets.

At 1530 GMT the rand was 1.16% firmer at 13.4725 per dollar, trading at a new 28-month high.

The rand rallied 2% this week and has gained more than 8% against the dollar this year so far.

“The strengthening bias in the rand remained broadly intact this week. … Most of the directional impetus has stemmed from the weaker U.S. dollar and higher commodity prices that have boosted South Africa’s exports,” said Kamilla Kaplan of Investec.

“Concurrently, expectations of the U.S. (Federal Reserve) tolerating higher inflation and leaving monetary policy accommodative for some time has benefited high yielding assets.”

The dollar fell on Friday after U.S. nonfarm payrolls data showed hiring increased in May as the pandemic eased, but not quite as much as expected, tempering expectations the Fed will tighten monetary policy sooner, rather than later.

Government bonds also firmed, and the yield on the instrument due in 2030 was down 12 basis points to 8.765%.

Stocks on the Johannesburg Stock Exchange (JSE) partly reversed the previous day’s losses to end the week at almost the same level where it ended last Friday.

The shares were primarily boosted by the weaker-than-expected U.S. jobs data which eased fears of an overheating of the economy, and thus calmed fears that strong jobs data would mean higher inflation in the coming weeks and months.

The benchmark FTSE/JSE all-share index went marginally up by 0.05% to end the week at 67,825 points, while the blue-chip index of top 40 companies closed up 0.07% to 61,617 points.

The gain was led by mining and industrials on the back of strong commodity prices and strong momentum in technology stocks, primarily index heavyweight Naspers Ltd. Naspers ended up 0.33%.

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