Rand re­treats as dol­lar de­mand re­turns

The Star Early Edition - - PRICES -

THE RAND weak­ened yes­ter­day, re­treat­ing from a one-week high as a plan by the fi­nance min­is­ter to pull the econ­omy out of re­ces­sion and pos­i­tive min­ing data were over­shad­owed by a resur­gence of dol­lar de­mand.

By 5pm, the rand had slipped 0.13 per­cent to R13.2667 to the dol­lar, hav­ing ear­lier hit a ses­sion best R13.1475 as tech­ni­cal and mo­men­tum in­di­ca­tors prompted in­vestors to buy back into the cur­rency and pocket short prof­its.

“The ZAR posted sub­stan­tial gains ear­lier on. That was ex­pected and in­di­ca­tors point to it be­ing over­sold. Gains were also sup­ported by a soft­en­ing of un­cer­tainty, es­pe­cially around the SARB’s in­de­pen­dence,” said Halen Bothma of ETM An­a­lyt­ics.

The rand shed nearly 5 per­cent in the first two weeks of this month after a gov­ern­ment watch­dog rec­om­mended the Re­serve Bank’s (SARB) pol­icy be changed from in­fla­tion-tar­get­ing to so­cio-eco­nomic wel­fare.

The watch­dog this week re­tracted the pro­posal fol­low­ing court chal­lenges by the cen­tral bank gover­nor, Fi­nance Min­is­ter Malusi Gi­gaba and par­lia­ment, eas­ing pres­sure on the cur­rency.

But yes­ter­day a dol­lar fight­back wiped away some of the sheen off a 3.6 per­cent year-on-year jump in min­ing pro­duc­tion and a Trea­sury plan that may see gov­ern­ment sell­off stakes in state firms to boost rev­enues.

Mean­while, on the stock mar­ket, the bench­mark JSE Top40 in­dex was up 0.82 per­cent at 47 056.02 points, while the broader all share in­dex added 0.75 per­cent to 53 300.96 points.

The bank­ing in­dex rose 1.54 per­cent with Capitec Bank Hold­ings the top per­former, climb­ing 1.95 per­cent to R820.

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