Rand on shaky ground as SAfrica power sup­ply wob­bles

The Financial Daily - - INTERNATIONAL -

in­dex since June - have raised con­cern about prof­its at US firms.

Earn­ings from ma­jor US firms have dis­ap­pointed in­vestors, with multi­na­tion­als from DuPont and Cater­pil­lar to Mi­crosoft Corp com­plain­ing that the strong dol­lar was hurt­ing prof­its.

Data on Tues­day showed US non­de­fence cap­i­tal goods or­ders ex­clud­ing air­craft, a closely watched proxy for busi­ness spend­ing plans, fell un­ex­pect­edly for a fourth straight month in De­cem­ber.

It marked the long­est down­ward stretch since 2012, stok­ing wor­ries that slow­ing global growth and cheap oil prices were curb­ing busi­ness spend­ing in the United States, one of the bright­est spots in the global econ­omy.

"US eco­nomic in­di­ca­tors are los­ing a bit of mo­men­tum lately, whether it is caused by a strong dol­lar or not," said a trader at a ma­jor Ja­panese bank. -Reuters JO­HAN­NES­BURG: The rand re­mained on the back foot against the dol­lar on Wed­nes­day af­ter weak­en­ing to 1-week lows overnight, as in­vestors fret­ted about the im­pact of South Africa's elec­tric­ity short­age on eco­nomic growth.

At 0636 GMT, the rand traded at 11.5800 per dol­lar, within a whisker of Tues­day's close of 11.5855.

It had fallen to 11.6100 in the pre­vi­ous ses­sion, its weak­est level since Jan. 20 ac­cord­ing to Thom­son Reuters data, weighed down in large part by power util­ity Eskom's warn­ing that the na­tional grid re­mained un­der se­vere strain.

Eskom, which sup­plies about 95 per­cent of South Africa's power, was forced to im­ple­ment con­trolled out­ages - re­ferred to as "load shed­ding" - for the sec­ond day in a row on Tues­day to avoid trig­ger­ing a to­tal col­lapse of the na­tional grid.

"The rand has been hurt by neg­a­tive sen­ti­ment and the ad­verse GDP im­pli­ca­tions sur­round­ing Eskom's lat­est round of load shed­ding," Bar­clays Africa said in a state­ment.

Mar­kets were also wait­ing for the U.S. Fed­eral Re­serve's state­ment due later on Wed­nes­day for point­ers on the tim­ing of pol­icy tight­en­ing in the world's big­gest econ­omy.

Govern­ment bonds edged higher on Wed­nes­day, and the yield on the bench­mark ma­tur­ing 2026 eased 3 ba­sis points to 7.17 per­cent. - Reuters Cen­tral Bank Euro­pean Cen­tral Bank Fed­eral Re­serve Re­serve Bank of Aus­tralia Swiss Na­tional Bank Coun­tries U.S.A U.K EURO CANADA SWITZER­LAND AUS­TRALIA SWE­DEN JA­PAN NOR­WAY SIN­GA­PORE DEN­MARK SAUDI ARA­BIA HONGKONG CHINA KUWAIT MALAYSIA NEWZEALAND QATAR U.A.E KR. WON THAI­LAND 2/3/2015 Re­serve Bank of New Zealand1/28/2015

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