UPDATE 1-South African rand steady; eyes on Fed minutes
(Updates prices)
JOHANNESBURG, July 7 (Reuters) - South Africa’s rand steadied against the dollar in afternoon trade on Wednesday, with market attention pinned on the release of minutes from the U.S. Federal Reserve later in the day.
At 1500 GMT, the rand traded at 14.3750 against the dollar, close to its previous close of 14.3775.
Investors will scrutinise the Fed minutes, due at 1800 GMT, for further clues about when U.S. interest rates might rise. Any sign they will rise soon tends to hurt emerging market currencies like the rand.
South Africa’s net foreign reserves dipped to $51.368 billion in June, central bank data showed on Wednesday, but that did little to sway the local currency.
Elsewhere, research firm NKC African Economics said it had raised its 2021 economic growth forecast for South Africa to 4.3% on the back of increased activity and mobility in recent months.
“The rise in global demand and bounce-back in commodity price levels will support South Africa’s industrial sector growth. And excess savings among middle- and high-income groups have and will support consumer spending in the coming months,” NKC said in a note.
It cautioned that the economic recovery from the COVID-19 pandemic would be a lengthy one, however, following a steep contraction of 7% last year.
On the Johannesburg Stock Exchange (JSE), stocks bounced back from the previous session low, boosted by resources as gold and palladium prices gained.
“We’re taking a bit of guidance from global markets, all time highs on the S&P 500, all time highs on the Nasdaq and then dragging the likes of the JSE upwards,” Sanlam Private Wealth Portfolio Manager Nick Kunze said.
The mining index climbed 2.19%, led by Anglo American Platinum up 5.02% and followed by Northam Platinum up 4.46%. Sibanye Stillwater rose by 2.98%.
The main Johannesburg all-share index climbed 1.45% while the Top-40 index rose 1.59%.
Retailer Steinhoff, battling to move on from a huge accounting fraud, leapt 21.38% following a two day sell-off.
On Wednesday it said Dublin-headquartered Hamilton, which sued Steinhoff on behalf of large South African asset managers, had withdrawn its appeal with a Dutch court, related to the retailer’s proposed settlement plan which was thrown into doubt last Friday by another court.
Government bonds firmed, with the yield on the 2030 instrument dipping 2 basis points to 8.9%. (Reporting by Alexander Winning and Nqobile Dludla Editing by Mark Potter)
UPDATE 1-South African rand hovers as markets U.S. inflation signals
(Updates prices, adds stocks)
JOHANNESBURG, June 24 (Reuters) - South Africa’s rand was flat on Thursday, with investors weighing conflicting signals from the U.S. Federal Reserve that pushed the dollar away from two-month highs.
At 1507 GMT, the rand traded at 14.2450 against the dollar, down just 0.07% from its previous close.
Global investors were left waiting for upcoming U.S. economic data for direction after conflicting signals on the timing of withdrawal of monetary stimulus in the country, with the dollar also vacillating on Thursday.
“For now, we can expect the rand to mostly track the dollar,” Andre Cilliers, a currency strategist at TreasuryONE, said.
The U.S. currency got some support overnight as two Fed officials said a period of high inflation in the United States could last longer than anticipated, a day after Fed Chair Jerome Powell had played down rising price pressures.
But it slipped on Thursday, paring back gains after hitting a two-month high last week.
Local investors also got further clues about inflationary pressures in Africa’s most industrialised economy, after Statistics South Africa also published data showing that producer price inflation quickened to 7.4% year-on-year in May, from 6.7% in April.
Data on Wednesday showed consumer inflation hit a 30-month high in May, but economists are not predicting the South African Reserve Bank will raise interest rates any time soon.
South African government bonds were also strengthened slightly, with the yield on the benchmark 2030 instrument dipping 6 basis points to 8.890.
Stocks were up, with the Johannesburg Stock Exchange’s Top-40 Index closing 0.71% higher at 60,118 points and the broader All-Share Index closing 0.67% higher at 66,263 points.
Insurer Old Mutual was the biggest winner on the blue-chip index, with its shares climbing over 8% after it announced it would further cut its stake in lender Nedbank , distributing $734 million worth of the bank’s stock among its own shareholders.
Its shares closed 6.12% higher. (Reporting by Emma Rumney; editing by Jonathan Oatis)
Rand Slumps With South African Riots Spreading Amid Covid Surge
(Bloomberg) – South Africa’s rand slumped to its weakest level against the dollar in more than two months as rioting that started with last week’s arrest of former President Jacob Zuma spread, weighing on the outlook for an economy already strained by a resurgence of the coronavirus.
The violent protests shuttered businesses and disrupted transport networks in the nation’s two richest provinces, Gauteng and KwaZulu-Natal. Zuma was sentenced to 15 months in jail for defying a court order to testify at a graft inquiry. The riots added to disruption sparked by the extension of a pandemic lockdown that’s hurting businesses and has robbed many people of wages in a nation with an unemployment rate of 32.6%.
“It is difficult to tell which is the greater emergency in South Africa right now: the riots, which have resulted in significant property damage, looting and affected the movements of goods along an important trade corridor, or the continued spread of Covid-19,” Siobhan Redford, an analyst at Rand Merchant Bank in Johannesburg, said in a client note. “It will be important to see the government take action.”
The rand declined as much as 1.9% to 14.4883 per dollar by 12:58 p.m. in Johannesburg, heading for its weakest level since April 30. Yields on the most-liquid 2026 government bonds climbed five basis points to 7.49%.
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