Rand slumps to one-week low, JSE up

THE RAND slipped to a one-week low against the dollar yesterday, hurt by a combination of a firmer dollar, higher-than-expected inflation print and negative sentiment spurred by recent cabinet changes.

Stocks posted modest gains with rand-hedged companies benefiting from the weaker currency.

At 5pm, the rand bid at R13.5566 to the dollar, 10.32c softer than at the same time on Tuesday, trading at its weakest levels since October 11.

“The stronger dollar is hurting most emerging market currencies,” Rand Merchant Bank currency trader, Jan Sluis-Cremer, said. “Inflation also printed marginally higher than forecasts, and yesterday’s (Tuesday’s) cabinet changes have added to the weaker rand.”

Domestic headline consumer inflation quickened to 5.1 percent year-on-year in September.

In a list of 16 emerging market currencies tracked by Reuters, the rand was by far the worst performer, followed by the Mexican peso and Brazil’s real.

President Jacob Zuma on Tuesday reshuffled his cabinet for a second time in seven months, rattling the rand and government bonds.

In fixed income, the yield for the benchmark government bond rose 3 basis points to 8.77 percent.

On the stock market, the benchmark JSE Top40 index was up 0.46 percent at 51 747.21 points, while the broader all share index climbed 0.47 percent to 58 152.41 points.

Rand hedges lifted the bourse. Britain-based property company Capital & Counties was up 4.35 percent to R48.48, while luxury goods maker Richemont gained 1.8 percent to R123.20. Steinhoff gained 1.25 percent to R60.75.