RAND GAINS, DEFIES JOBS DATA
THE RAND rallied more than 1 percent yesterday, shrugging off still-high unemployment figures and a plunge in manufacturing output to hit a three-session high, as a bounce in risk demand globally was spurred by easing coronavirus fears.
At 5pm, the rand bid at R14.8582 to the dollar, 16 cents stronger than at the same time on Monday, with most of the gains coming late in session as New York traders came online and lapped up the high yielding unit.
Unemployment remained at an 11-year peak of 29.1 percent in the fourth quarter while manufacturing output for December shrank 5.9 percent year-on-year – further indications of SA’s economic growth being in dire straits.
But traders overlooked weak fundamentals and bagged the currency on the cheap after the unit’s 8 percent slide since the beginning of the year.
The dollar retreated from a fourmonth high against the euro yesterday as risk appetite improved, helped by a slowing rate of new coronavirus infections.
Comments by Federal Reserve chairman Jerome Powell on Tuesday affirmed the view that the US central bank was unlikely to change interest rates in the near term, adding to the attractiveness of high-yielding currencies like the rand.
Bonds were flat, with the yield on the 2030 government issue steady at 8.865 percent.
On the stock market, the JSE Top40 index rose 0.38 percent to 51 201.08 points, while the broader all share was up 0.23 percent to 56 891.2 points, with the blue-chip index led higher by a near 4 percent bounce in fuel-maker Sasol almost wiping out the previous session’s slide.
Miners
and were also on the up, by 1.53 percent and 1.72 percent to R37.83 and R150.55, respectively.
however, fell 3.77 percent to R186.50, after the grocer released a modest 18-week trading statement showing sales in Southern Africa increased by only 4.9 percent, due to weaker consumer spending. I Reuters