Rand recovers from 14-year lows on trade surplus

South Africa's rand touched a new 14-year low against the dollar on Friday but later turned firmer, helped by data showing a surplus in the trade balance for the second month in a row.

The local unit hit its weakest in the session at 12.7700/dollar, a level last seen in December 2001, but clawed back to a high of 12.5810 after the revenue service said the trade surplus widened to 5.80 billion rand.

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By 1533 GMT the rand was trading at 12.6100 to the greenback, up 0.74 percent from where it ended Thursday trade in New York.

"The ... trade balance data bolstered the rand somewhat shortly after the release, as it helped ease fears about how well South Africa will cope with U.S. monetary policy normalisation, given the country's large current account deficit," said NKC analyst Bart Stemmet.

"That said, trade dynamics would need to improve markedly over the medium term before we see a continued currency rebound - but this is unlikely to happen."

The rand has fallen 9 percent against the dollar since the year began, pressured mostly by investors offloading emerging market assets in expectation of higher interest rates in the United States.

The rand has been particularly vulnerable because South Africa relies heavily on portfolio inflows to plug its current account deficit, currently at 4.8 percent of GDP.

In fixed income, the yield on the benchmark government bond due in 2026 added 1.5 basis points to close at 8.26 percent.

- Reuters