RAND GAINS, STOCKS RETREAT

THE RAND recovered from initial losses yesterday on the back of a weaker dollar as traders awaited crucial US inflation and retail sales data in coming days.

At 5pm the rand was 0.27 percent firmer at R14.57 to the dollar.

The local currency rallied to R14.44 last week, its strongest in six weeks, but again failed to hold below R14.50.

Recent demand for emerging-market currencies has been driven by weakness in the dollar and Treasury yields after minutes from the US central bank’s latest meeting showed it was in no hurry to tighten monetary policy.

But the rocky outlook for South Africa’s economy, which shrunk by a record 7 percent last year and has shown signs of a sticky rebound this year, has halted the rand’s rally, with investors taking profits and awaiting new data.

While South Africa’s February mining and retail sales numbers due this week are expected to give some insights into the health of the local economy in the first quarter, the major economic focus was on US data.

“While we wait for a new catalyst to provide the local unit with direction, markets will be keeping a close eye on US inflation,” Citadel Global executive director, Bianca Botes said.

US consumer price data for March was due today and retail sales data on Thursday.

Bonds weakened, with the yield on the benchmark 2030 government issue up 7 basis points to 9.37 percent.

With no local catalyst, stocks fell, taking their cue from weakness in global stock markets as traders look for fresh news to drive the market higher as the US earnings season kicks off this week.

Gold also slipped as an uptick in US Treasury yields dimmed bullion’s appeal. This led to the mining index falling by 2.93 percent with Harmony Gold leading the fall at 4.51 percent to R66.65.

The JSE all share index fell 1.19 percent while the Top40 index ended the day 1.28 percent weaker.