RAND, STOCKS BOUNCE BACK

THE RAND started the week on a firmer footing yesterday, benefiting from improved risk appetite on global markets.

At 15.27pm, the rand traded at R15.17 against the dollar, 0.8 percent stronger than its previous close.

Last week the rand had a torrid time, losing almost 4 percent against the dollar as expectations that the US Federal Reserve (Fed) would start tapering its stimulus this year boosted the US currency at the expense of riskier assets.

But the market yesterday opened with a more generous mood towards riskier assets on optimism over Covid19 vaccines and easing lockdown restrictions.

But investors said the rand could still find itself on shaky ground in the coming days.

“The rand is vulnerable to further weakness, particularly on a worsening in the US growth outlook if US third wave is more severe than the administration anticipates,” said Annabel Bishop, chief economist at Investec.

This week, South Africa-focused investors will look to unemployment data, the producer price index and the central bank’s leading indicator for clues about the health of the country’s economy.

Investors on the JSE took the market to its first positive close on the back of a global lift in shares after three consecutive days of huge losses.

They have their eyes firmly set on Fed’s meeting on Friday to find clues on the roadmap for the tapering.

“We have actually been living in a highly abnormal monetary policy situation … never had interest rates this low in either short term or long term,” said Wayne McCurrie, portfolio manager at FNB.

The Top40 index, which represents blue-chip shares, closed on Monday up 1.27 percent to 60 562.05 points and the benchmark all share index ended up 1.24 percent to 66 829.21 points.