Rand strengthens as soft US data hit the greenback
THE RAND ended firmer against the dollar on Friday and posted its biggest weekly gain since December last year after a string of soft US data hit the greenback.
Stocks ended lower, tracking weak global markets, with FirstRand among the worst performers after the bank dropped its bid to buy into Nigeria’s Sterling Bank.
At 5pm, the rand was bid at R6.7226 to the dollar, 2.64c firmer than on Thursday. It traded at R6.7070 earlier in the day, a one-month high and slightly up from Thursday’s R6.7150 close in New York.
“We’ve had a progression of steadily worse numbers from the US this week, highlighting they’re struggling to break the shackles of the recession, so it’s been a bit of a rush to highyielding assets,” a local currency dealer said.
The local currency gained more than 3 percent against the dollar last week, having started the week at the R6.95 level and broken key resistance since then.
“We’ve had quite a decent move this week and saw a lot of real money into our bond market as well, once again a flight to safety,” the dealer added.
Government bonds ended mixed but analysts say foreign buying will continue to bolster the market while the global economy remains uncertain.
The Top40 index of blue chips was off 1.1 percent at 28 258.28 points while the all share index declined 0.95 percent to 31 575.65 points.
“It looks like the US economy is still under pressure after all the efforts they put in place to try and stimulate the economy,” said Newstrading trader Martin Letsoane.
South Africa’s second-biggest banking group, dropped 1.9 percent to close at R19.80. The company said it had dropped plans to buy control of Nigeria’s Sterling Bank, after failing to agree on terms of the transaction. Elsewhere,
2.3 percent weaker at R183.75, was down 1.43 percent at R255 and
lost 1.3 percent to close at R324.59.