Rand slides as foreigners renew selloff

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NewRandMoney

Reuters.

Johannesburg - The rand retreated a third day against the dollar as foreigners sold South African bonds and stocks, prompted by US retail sales that beat estimates and added to speculation about cuts in stimulus next week.

After four days of inflows, buyers outside South Africa sold a net 722 million rand ($69 million) of bonds yesterday, bringing outflows this month to 1.9 billion rand, according to JSE Ltd. data.

They sold 385.1 million rand of shares.

The US sales climbed 0.7 percent in November, beating a 0.6 percent estimate in a Bloomberg survey, Commerce Department figures showed yesterday.

“The rand is weaker because of the US retail sales,” Michael Potgieter, a market analyst at ETM Analytics in Johannesburg, said by phone today.

“It’s likely to remain around these levels.”

The currency of Africa’s biggest economy fell 0.2 percent to 10.4119 per dollar as 9:13 a.m. in Johannesburg, heading for a weekly drop of 0.9 percent.

Yields on benchmark bonds due December 2026 rose one basis points, or 0.01 percentage point, to 8.27 percent.

The Federal Reserve will probably begin tapering its $85 billion in monthly bond purchases at its meeting December 17-18, according to 34 percent of economists surveyed this month by Bloomberg, an increase from 17 percent last month. - Bloomberg News


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