Rand slips on central bankers’ comments

THE RAND weakened yesterday, extending losses to a third consecutive session after comments by central bankers in developed economies suggested a shift towards policy tightening.

The rand was trading at R13.23 against the dollar by 5.17pm, 1.26 percent weaker from the previous session’s close .

“The rise in global yields has added to the pressure on the rand,” RMB Global Markets said in a note. “Last week’s comments by global central bankers, (European Central Bank) ECB president Draghi most importantly, gives the impression that global policy tightening will continue even with the sharp drop-off in inflation.”

In fixed income, government bonds were flat, with the yield on the benchmark 2026 instrument at 8.825 percent.

On the bourse, the blue chip JSE Top40 index gained 1.26 percent to 45 994.44 points and the broader all share index added 1.07 percent to 52 163.8 points.

Mining stocks were the top the gainers thanks to higher metal prices, with copper buoyed by a brighter demand outlook from China, the world’s biggest commodity consumer.

Anglo American gained 3.3 percent to R181.31 and competitor BHP Billiton was 3.61 percent higher at R206.87.

Meanwhile, US and European shares kicked off the new quarter with gains yesterday as talk of interest rate increases boosted bank stocks, while the dollar edged up from nine-month lows as US Treasury yields hit their highest since mid-May.

The Standard & Poor’s 500 index rose after notching its strongest first half-year performance since 2013, with the energy sector leading the pack in percentage gains.