Rand recovers, bourse inches lower

THE RAND recovered from threeweek lows yesterday as fears of possible credit-rating downgrade eased, while stocks fell on profit-taking after they reached record highs.

At 5.07pm, the rand traded at R13.2275 to the dollar, 0.4 percent firmer than its New York close on Tuesday.

The rand started the day by dropping to a three-week low of R13.32, extending losses suffered in the previous two sessions as it broke through technical support levels at R13, R13.12 and R13.30.

The rand took a hit after Moody’s, the last of the top three ratings firms to rank South Africa investment grade, warned on Monday that pressure seemed to be growing on the central bank, and the Treasury, to implement expansionary policies .

Moody’s is expected announce a review on August 11.

“We think that the downgrade just two months after the previous one is unlikely,” 4Cast analysts said in a note. “We think that the currency will recover in the next few days, with the USD/ZAR possibly falling below the (R)13 support level.”

On the stock market, the benchmark JSE Top40 index fell 0.46 percent to 48 811.07 points and the all share index was down 0.34 percent to 55 200.49 points.

The all share index had extended its gains to a record 55 554.23 points yesterday, after gaining on Monday on foreign flows into equities and offshore earnings. Among the biggest fallers,

dropped 3.88 percent to R127.95,

lowered 3.42 percent to R22.84, was down 3.41 percent to R18.72 and retreated 2.01 percent to end the session at R2 850.