Rand slips on cen­tral bankers’ com­ments

The Star Early Edition - - PRICES - Reuters

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.

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