Rand softer, market digests new cabinet

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NewRandMoney Reuters.

Johannesburg - The South African rand weakened slightly against the dollar on Monday as the market digested President Jacob Zuma's new cabinet, particularly his decision not to reappoint Pravin Gordhan as Finance Minister.

The market is also nervous ahead of GDP data due out on Tuesday, which is expected to show a contraction in the first quarter as a protracted platinum strike takes its toll on mining output.

At 17:50 SA time the rand was trading at 10.3585 to the greenback, down 0.53 percent from Friday's close.

Zuma announced his new team for his second five-year term on Sunday, appointing former deputy finance minister Nhlanhla Nene as finance minister and moving Gordhan to handle local government.

Although Nene is also quite well respected by markets, investors will want early signs that he will follow Gordhan's investor-friendly policies and are also hoping that the country's new mines minister does better than his predecessor at resolving labour strife in the sector.

Added to that, global geopolitical news and key data releases will also impact global risk appetite, affecting the rand.

“The market is expected to digest President Zuma's cabinet minister announcements, the outcome of Ukrainian elections and interest rate-sensitive local and US data releases over the coming days, which collectively should be rand negative,” Barclays Africa said.

Government bonds were little changed from Friday's closing levels, with the yield for the 2026 government bond flat at 8.125 percent while debt maturing in 2015 dipped half a basis point to 6.625 percent. - Reuters

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