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JOHANNESBURG, Jan 26 (Reuters) - The rand traded firmer on Friday, holding at its best levels since mid-2015, as sentiment was lifted by a weaker dollar and expectations that the new leader of the ruling ANC would rejuvenate the economy.
At 1545 GMT, the rand was 0.44 percent stronger than Thursday's close at 11.8700 to the dollar , after breaking below the psychological 12 rand per dollar level on Wednesday for the first time since mid-2015.
Analysts at NKC African Economics said the U.S. currency's weakness was the main factor behind recent rand strength.
The dollar fell more than half a percent against a basket of currencies on Friday as comments by senior U.S. officials this week supporting a weak dollar reverberated through currency markets. Optimism over changes promised by the new leader of the ruling African National Congress (ANC), Cyril Ramaphosa, were further factors driving the currency higher. The rand has surged since Ramaphosa won the race to succeed Jacob Zuma as ANC leader last month, putting him in pole position to become South Africa's next president.
Ramaphosa, who has promised to fight corruption and boost economic growth, was talking up South Africa as an investment destination at the World Economic Forum in Davos this week.
In fixed income, the yield on the benchmark 2026 government bond was up 0.5 at 8.43 percent.
On the equities market, South Africa's main stock index closed down 0.14 percent to 61,595 points and the blue-chip JSE Top-40 index fell 0.05 percent to 54,530 points.
As the rand strengthened, investors sold off shares in local companies that earn the bulk of their revenues in hard currency, known as rand hedge shares, dragging the index lower.
"You have a lot of the rand hedges, the likes of British American Tobacco all weaker this week mainly being tied down by a firmer rand," said GT247 trader Paul Chakaduka.
British American Tobacco fell 1.17 percent to 820 rand, Anglo American fell 0.17 percent to 294 rand while Glencore was down 0.18 percent to 67.59 rand.
On the upside, troubled South African retail group Steinhoffclosed up 1.48 percent to 7.55 rand after it said in a presentation to European lenders it expected to give a quarterly trading update at the end of February. Steinhoff, which owns more than 40 brands including Poundland in Britain, was forced to postpone the release of financial results when the crisis broke in December.
"Their next reviewed numbers will be very significant for Steinhoff in that a lot of investors or analysts will be out there looking whether or not this business remains liquid," Chakaduka said.
(Reporting by Nqobile Dludla and Alexander Winning; editing by Biju Dwarakanath/Mark Heinrich)
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