MARKETS WRAP

THE RAND firmed against the dollar yesterday, as market sentiment improved after a coronavirus-induced lockdown was lifted over the weekend, while a weaker US currency also helped the local unit.

At 5pm, the rand bid at R17.31 to the dollar, 17 cents firmer than at the same time on Monday.

“Buying sentiment towards the local currency has been stimulated by a sweeping removal of lockdown restrictions over the weekend, while dollar weakness continues to support upside gains,” said Lukman Otunuga, senior research analyst at FXTM.

“The USDZAR has found resistance below (R)17.50. A broadly weaker dollar could drag prices back towards (R)17.15 in the short term,” Otunuga added.

The dollar fell against a basket of major currencies for a fifth consecutive trading day yesterday, reaching its lowest level in over two years, under pressure from low yields and bleak economic data in the US.

In South Africa, President Cyril Ramaphosa on Saturday announced a further easing of the country’s strict coronavirus lockdown.

Official forecasts predict gross domestic product will contract by at least 7 percent this year, extending the pain for an economy that was already in recession before the Covid-19 pandemic struck.

Stocks dipped, as Sasol extended its losses after it said on Monday it would issue up to $2 billion (R34.8bn) of shares as it battles high debt, lower oil and chemicals prices, and the coronavirus crisis. Its shares fell 5 percent at R131.95.

The all share index lost 0.71 percent at 57 025.16 points, while the Top 40 companies index fell 0.76 percent at 52 738.12 points.

In fixed income, the yield on the 2030 bond was flat at 9.28 percent. I Reuters