SA rand low

JOHANNESBURG. — South Africa’s rand slipped to its lowest in two weeks yesterday, succumbing to month end demand for dollars by local firms as the increasing chances of higher interest rates in the United States lured bulls back into long-dollar positions.

At 0640 GMT the rand was 0,4 percent weaker at 11,8350 per dollar, its softest level since February 14, compared to an overnight close of 11,7875.

It was the first time in more than two weeks the rand closed above technical support around 11,80, after weakening for three consecutive sessions, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands. Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ruling African National Congress (ANC) in December, was now giving way to global headwinds.

The dollar index remained near 5-week highs early on Thursday, still drawing support after the Federal Reserve’s new chief Jerome Powell struck an optimistic tone on the U.S. economy, raising bets of at least four rate hikes by the bank in 2018.

Stocks opened softer with the benchmark Top40 index down 0,13 percent. Bonds were also softer, with the yield on the benchmark paper due in 2026 up 4 basis points to 8,165 percent.