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UPDATE 1-South Africa's rand slightly firmer, breaks past key 13.00 level
August 29, 2017 / 4:20 PM / 21 days ago

UPDATE 1-South Africa's rand slightly firmer, breaks past key 13.00 level

(Updates prices)

JOHANNESBURG, Aug 29 (Reuters) - South Africa’s rand broke past a key level on Tuesday, recovering for early concerns about North Korea’s missile launch, while gold stocks rose in a generally lower session.

The rand traded 0.38 percent stronger at 12.9850 per dollar, breaking past the critical 13.00 to touch its strongest level in about four weeks.

This recouped all the losses suffered in early deals following news of the launch, which raised fears of war. “The problem with ... catastrophe trade(s) is that there is only a very small chance of a massive market event and a near certain chance that nothing will happen,” said John Cairns, a currency strategist at Rand Merchant Bank.

“As with all the previous missile launches, (one should) expect risk aversion to die away rapidly, and for risk assets to recoup their losses.” said John Cairns, a currency strategist at Rand Merchant Bank.

“The problem with the catastrophe trade is that there is only a very small chance of a massive market event and a near certain chance that nothing will happen.”.

The rand will look for direction from economic data later in the week in the form of July money supply and private sector credit data on Wednesday, as well as producer price inflation figures and trade numbers due on Thursday.

On the bourse, traders piled into gold mining shares as the price of bullion cruised higher after North Korea fired a missile early on Tuesday that flew over Japan.

AngloGold Ashanti rose 7.8 percent, making it the biggest gainer on the exchange, while rival Harmony added 7 percent.

Overall, investors took their cue from a downbeat tone in major overseas markets. The JSE Top-40 index lost 0.35 percent to 49,883 and the broader All-share index lost 0.26 percent to 56,409.

In fixed income, the yield for the benchmark government bond due in 2026 was flat at 8.580 percent. (Reporting by Tiisetso Motsoeneng)

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