JOHANNESBURG - The rand remained above the crucial 12 to the dollar mark yesterday as the continuing stalemate over President Jacob Zuma’s future capped demand.

Stocks retreated led by mining firm Gold Fields after the company flagged lower earnings.

At 5pm, the rand bid at R12.0684 to the dollar, 13.58cents softer than at the same time on Wednesday.

Early trading locally saw low volumes and the unit drifting around R12.10 before buying interest, as traders in London and later New York came online, spurred the currency towards resistance level around R12.02.

The unit this week has struggled to push beyond last week’s rally to R11.85, a touch off its two-and-a-half year best, with optimism over the speedy removal of Zuma from office waning, leaving the currency open to profit-taking.

Yesterday leaked comments from the ANC’s treasurer general Paul Mashatile revealed the party had been preparing to fire Zuma at the weekend, but a negotiated exit was now more likely as the incumbent dug in.

“As long as the optimism about a fresh start in politics does not fade the rand is likely to trend stronger against the dollar,” said analyst at Germany-based Commerzbank, Alexandra Bechtel, in a note.

Bonds weakened, with the yield for the benchmark government bond due in 2026 up 3 basis points to 8.43percent.

The country’s dollar bonds fell across the curve on with the 2041 issue down 1.7cents to a near two-month low as the political deadlock over Zuma’s future continued.

On the bourse, the benchmark JSE Top40 index fell 0.49percent to 49934.79 points, while the all share index lowered 0.44percent to 56635.69 points.

“It was a big miss, they [the market] expected better results from Gold Fields,” said BP Bernstein trader, Vasili Girasis.

Gold Fields dropped 4.06percent to R47.76 after falling more than 5percent in intra-day trade after the company warned that profits could be down as much as 12percent.

Further losses came from the resource sector which cam under pressure amid a stronger dollar, with Lonmin 3.95percent lower to R11.20 and AngloGold Ashanti dropping 2.73percent to end the session at R121.15.

- REUTERS