Rand slips to 3-week lows, stocks decline

THE RAND tumbled to its weakest in more than three months and bonds also fell, as a rally in the dollar and US Treasuries battered emerging currencies and stocks yesterday.

At 5pm, the rand bid at R12.4895 to the dollar, 11.55 cents weaker than at the same time on Tuesday, its weakest since January 10, after hitting a low of R12.5325 as emerging-market currencies dropped.

The Russian rouble was down one percent while the Turkish lira slipped 0.4 percent.

“The rand has weakened a lot this week and it’s because of a lot of external risks,” said Jameel Ahmad, global head of currency strategy at FXTM. “It’s not a South Africa story,” he said, pointing to rising oil prices and worries over a breakdown in the US-Iran nuclear deal.

US President Donald Trump has threatened to scrap the 2015 agreement under which Iran curbed its nuclear programme in return for sanctions relief, sparking a wave of risk-off sentiment globally.

The dollar hit a four-month high yesterday after a rise in benchmark US Treasury yields above 3 percent, leading investors to wonder whether the dollar was breaking out of a prolonged weak spell.

The yield on the benchmark bond due in 2026 was up 10 basis points to 8.335 percent, its highest since February 14.

Stocks were also weaker, with the JSE Top40 blue chip index down 1.25 percent at 50 234.85 points and the wider all share index down 1.19 percent at 56 987.19 points.

“Our market is reacting to a weaker close of the US market, that’s why you saw a weaker opening,” said GT247 head of trading, Nilan Morar.

Stocks falling the most were resources and financials tracking the currency’s tumble.

Royal Bafokeng Platinum was the biggest decliner on the all share, 8.26 percent weaker at R23.09, after world number one platinum producer Anglo American Platinum sold most of its stake in the company, yesterday .

Gold stocks closed 1.59 percent lower. Gold Fields was down 4.93 percent at R46.62.

The banking index was down 1.9 percent on the day. Nedbank weakened 2.9 percent to end the session at R285.24.