JOHANNESBURG - The rand weakened along with other emerging currencies yesterday as the dollar regained ground it lost last week and investors awaited details of new president Cyril Ramaphosa’s plans to revive the economy.
At 5pm, the rand bid at R11.6881 to the dollar, 4.82cents softer than at the same time on Friday, having earlier yesterday touched a session-best R11.61 as trade in New York resumed before retreating as the greenback extended gains for a second day.
Domestic markets have rallied in recent days, with the rand hitting a three-year high, driven by hopes that a change in the political leadership could re-ignite the continent’s most industrialised economy.
Ramaphosa’s maiden state of the nation address on Friday pushed the currency to the three-year milestone before it faded with profit-taking and defensive positioning as a budget and credit ratings reviews loom.
Markets are keenly awaiting Finance Minister Malusi Gigaba’s budget speech tomorrow.
“Expect sharp rand reaction directly after the budget, and again when Moody’s provides its response - presumably within a day or two of the event,” said Rand Merchant Bank chief strategist, John Cairns in a note.
Hurt by nine years of mismanagement under scandal plagued president Jacob Zuma, the country faces a R50.8billion revenue gap and soaring debt that Gigaba will have to tackle.
Bonds were firmer, with the yield on the benchmark paper due in 2026 down to 8.1 percent.
Meanwhile, stocks came off highs reached last week, amid low trade volumes with market holidays in the US and China.
The benchmark JSE Top40 index fell 0.75percent to 51717.42 points, while the all share index lost 0.71percent to 58701.37 points.
Stocks saw a broad-based decline amid low volumes, after the main index hit a more-than-three-year high on Thursday.
Dis-Chem Pharmacies lost 3.61percent to R35.20, Curro Holdings lowered 6.66percent to R36.15 and AngloGold Ashanti weakened 2.74percent to R120.80.
“Markets are taking a breather, volumes are noticeably thinner than when America is open and the Chinese trade,” said Independent Securities’ trader, Ryan Wood.