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JOHANNESBURG –The rand slipped yesterday, surrendering the previous session’s gains as the dollar rebounded from a sell-off triggered by fears the US economy is heading for recession.

At 5pm, the rand bid at R14.4070 to the dollar, 6cents softer than at the same time on Monday.

“Market fears over the US economy heading for a recession seem to be easing and this continues to support appetite for the greenback,” FXTM analyst Lukman Otunuga said.

“The South African rand like many other emerging market currencies is likely to remain driven by external factors this week.”

On Monday, the rand gained more than 1 percent in a broad emerging market rally sparked by renewed fears that economic growth in developed markets was set to contract after an inversion of the US yield curve and poor manufacturing data from Germany and Japan.

Government bonds also weakened, with the yield on benchmark 2026 paper adding 3 basis points to 8.74percent.

Stocks closed up slightly as riskier assets showed signs of stability, while the bullion sector weighed on further gains.

The all share index ticked up 0.49percent to 55638.43 points and the Top40 index was up 0.43percent at 49372.21 points.

Among the decliners, the gold sector fell 1.18percent after spot gold prices retreated from more than three-week highs. 

Reuters