Fed’s possible rate increase puts rand on the back foot

THE rand retreated for a third consecutive session yesterday to its weakest level in a week against the dollar while stocks also fell, both assets pressured by signs the US central bank could still lift rates this year.

By 1600 GMT the rand had slid 0.9 percent to R13.5065 per dollar, following a close at 13.3860 overnight in New York.

Comments on Thursday by a top Federal Reserve official supporting an interest rate increase as early as September boosted the dollar, putting emerging currencies on the back foot, with the rand among the biggest losers.

Gold prices also fell sharply, by as much 1.5 percent at one stage, adding further pressure on commodity-linked currencies. On the bourse, stocks were also lower, with bank and retail shares also hit by the hawkish Fed.

The benchmark Top-40 index was down 0.41 percent to 45 877 points and the broader All-share index was 0.41 percent lower at 52 771.

Shares in Standard Bank, dropped 1.93 percent to R15. Food retailer Shoprite slid 1.25 percent to R202.

Pharmaceutical producer Adcock Ingram Holdings gained 3.98 percent to R47.05 after reporting a 41.9 to 43 percent increase in earnings in their interim results. – Reuters