Rand recoups losses

THE RAND recouped some of its steep losses yesterday as investors sold dollars to book profits, but still hovered near 13-year lows it hit after a selloff of emerging market currencies in the previous session. By 5pm, the rand was bid at R12.3160, 7.41c softer, and also losing some of the momentum that saw it recover more than 1 percent to a session high of R12.2445.

THE RAND recouped some of its steep losses yesterday as investors sold dollars to book profits, but still hovered near 13-year lows it hit after a sell-off of emerging market currencies in the previous session.

By 5pm, the rand was bid at R12.3160, 7.41c softer, and also losing some of the momentum that saw it recover more than 1 percent to a session high of R12.2445. The currency also firmed against the euro and the pound, gaining 3.68c and 12.05c respectively.

“Some traders are opting to lock-in some profits following the exceptionally strong losses in the past couple of days,” said Jana van Deventer, an economist at ETM Analytics.

However, the currency along with domestic fixed income assets are expected to remain on the backfoot, with some market participants pricing in a psychologically significant move to the R13.000 mark and a further uptick in bond yields.

Government bonds tracked the firmer rand in the session, with yields falling on the day. The benchmark instrument due in 2026 shedding 7.5 basis points to 7.9 percent. “Today we saw the first bit of respite in the bonds even though the rand is still quite weak,” said Alexa Nicolau, a fixed income specialist at Rand Merchant Bank.