Pol­icy un­cer­tainty weighs on the rand

The Star Early Edition - - PRICES - Reuters

THE RAND weak­ened yes­ter­day as in­vestors fret­ted over pol­icy un­cer­tain­ties in­clud­ing the in­de­pen­dence of the cen­tral bank, although traders eye­ing short po­si­tions and bet­ting on fur­ther weak­ness helped it claw back some ground.

By 5pm, the rand had weak­ened to R13.4173 against the dol­lar, off a ses­sion low of R13.5075, as in­con­clu­sive US Fed­eral Re­serve min­utes kept the dol­lar near one­week highs.

The dol­lar then turned weaker after softer-than-ex­pected pri­vate jobs data, but over­all sen­ti­ment to­ward lo­cal as­sets re­mained uneasy after the pub­lic pro­tec­tor’s of­fice said yes­ter­day it would op­pose le­gal chal­lenges to its rec­om­men­da­tion to change the cen­tral bank’s man­date.

The rand hit a seven-week trough after the ANC failed to agree a clear plan to get the econ­omy out of re­ces­sion, with pledges to na­tion­alise the cen­tral bank and ex­pro­pri­ate land set to stoke fears fur­ther.

Bonds were weaker with the yield on the bench­mark pa­per due in 2026 ris­ing.

Mean­while, stocks re­treated along with mar­kets in Europe and the US. The bench­mark JSE Top40 in­dex re­treated 0.52 per­cent to 46 000.77 points, while the broader all share in­dex dropped 0.38 per­cent to 52 285.08 points. Lux­ury goods maker

Richemont was down 2.27 per­cent to R107.55 as more than half of the JSE’s blue chip stocks lost ground.

“It’s a broad-based sell off, we’ve seen Europe lows and the Dow and the S&P down fairly sharply,” said NorthShore Cap­i­tal fund man­ager, Mark Loub­ser.

The neg­a­tive press about the un­cer­tainty sur­round­ing the ANC’s pol­icy di­rec­tion could also be weigh­ing on stocks, he added.

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