MARKETS WRAP

THE RAND dipped yesterday as the US dollar was lifted by Federal Reserve (Fed) minutes that were not as dovish as some traders had expected.

At 5pm, the rand bid at R17.32 to the dollar, 16 cents softer than at the same time on Wednesday.

In the absence of major domestic data releases this week, the rand has mainly taken its cue from global factors.

The readout of last month’s Fed meeting gave few clues about whether a more dovish shift in policy is possible in the coming months, helping to ease recent selling pressure on the dollar.

Power utility Eskom mplemented a third consecutive day of planned power cuts yesterday after breakdowns at some of its coal-fired power stations.

Local financial markets had shrugged off the latest bout of power cuts until yesterday, and they highlight the obstacles to growth in Africa’s most industrialised economy.

Official forecasts are for a contraction of at least 7 percent this year, as a strict lockdown from late March piled pressure on local businesses and the coronavirus pandemic dented global demand for South African exports.

On the JSE, the all share index retreated 1.42 percent to 55629.98 points, while the Top40 lost 1.45 percent to 51380.02 points.

Meanwhile, emerging market stocks and currencies slumped yesterday as the Fed reiterated a tough and prolonged economic recovery, while Turkey’s lira dipped after a rare surge, with all eyes on a central bank decision on interest rates.

The lira was 0.4 percent lower, but a 1.2 percent rise on Wednesday kept the currency from hitting new lows.

Turkish President Tayyip Erdogan said on Wednesday he would announce “good news” on Friday, spurring the surge.

MSCI’s index of emerging market stocks dropped 1.5 percent. I Reuters