Rand weakens, rate cut speculation for 2011
THE rand weakened slightly yesterday as investors shunned riskier assets after a downgrade of Ireland, and stocks fell as gold miners drew profit taking.
The rand reversed earlier gains to hit a session low of 6.8570 to the dollar. By 1533 GMT, it was trading at 6.8545. “It weakened a bit as the euro took a smack after that Ireland downgrade,” said a local trader.
The rand has gained nearly 30 percent since the beginning of 2009, mainly due to increased inflows into the bond market. Analysts expect this phenomenon to continue in 2011, pushing the rand even firmer.
Bonds firmed on increasing speculation that the Reserve Bank could cut rates again in the New Year.
The Top-40 blue-chip index slipped 0.23 percent to 28 215.48 points and the broader All-share index fell by the same margin to 31 631.07.
AngloGold Ashanti dropped 4.82 percent to R329.32 and rival Harmony fell 2.94 percent to R85.43. Junior miner Wesizwe Platinum surged 11.68 percent to R2.20.
RMB Holdings gained 2.87 percent to R38. – Reuters