JOHANNESBURG - The rand stumbled as contagion effects took hold, while greenback strength resumed on the back of stable bond yields according to NKC Research.
The South African unit tracked emerging market currencies weaker, notably the Turkish lira, as souring risk sentiment weighed. Meanwhile, traders were cautiously awaiting directional guidance from the Sarb, which is due to announce a rate decision today. At the close of local trade, the rand quoted 0.9 percent weaker at R14.59/$, after trading in range of R14.40/$ - R14.67/$. The rand traded little changed overnight. Expected range today R14.45/$ - R14.80/$. Eyes will be on the Sarb’s meeting later today – we believe the central bank will keep interest rates on hold. In addition, South Africa’s credit risk should grab attention as Moody’s is set to announce its rating decision tomorrow.
South African bourse
The JSE All Share (+1.0 percent) ended higher yesterday, led by gains in large technology (+2.7 percent) and consumer goods (+1.2 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.6 percent) traded lower. In local news, Steinhoff’s (+4.0 percent) share price edged higher after the embattled retailer said it had raised R4.8bn from the sale of its 26% stake in KAP Industrial (-7.0 percent).
Brent crude oil
The Brent oil price traded little changed yesterday, supported by disruptions to Venezuelan crude exports but counterweighed by a report showing that US fuel inventories increased last week. At the close of local trade, benchmark Brent crude futures quoted 0.2 percent lower at $68.07pb. Crude prices traded weaker during Asian trade.
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