South Africa\u2019s rand advanced to a three-month high against the dollar as delegates at the ruling African National Congress\u2019 conference elect a new leader.<\/p>\n
Traders are betting Cyril Ramaphosa will win after gaining more branch nominations than his opponent, Nkosazana Dlamini-Zuma. Ramaphosa, one of the wealthiest black South Africans, has pledged to revive the struggling economy and stamp out corruption. Dlamini-Zuma has echoed President Jacob Zuma\u2019s call for \u201cradical economic transformation\u201d to redistribute wealth to the black majority, a shift investors fear may blow out the budget deficit and spark rating downgrades.<\/p>\n
The South African currency gained 0.1% to R13.0820 per dollar as of 6:53 a.m. in Johannesburg, the strongest level since September 12 on a closing basis, according to data compiled by Bloomberg. Against the euro, it approached a five-month high and was at 15.3859.<\/p>\n
\u201cThe rand is stronger on the likelihood of Cyril Ramaphosa being elected ANC head,\u201d Stephen Innes, the Singapore-based head of trading for Asia Pacific at Oanda Corp., said in a note. \u201cAnd indeed Tokyo \u2018carry traders\u2019 will be smiling this morning. \u201d<\/p>\n
The election results are expected to be announced on Monday. The rand\u2019s overnight implied volatility against the dollar soared to 72%, suggesting traders are anticipating large price swings on the outcome of the contest, which has divided the 105-year-old ANC, weighed on South Africa\u2019s currency and bonds and deterred foreign investment.<\/p>\n