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CAPE TOWN - The increasingly hawkish tone of the US Federal Open Market Committee (FOMC) meeting added to the rand’s woes yesterday, sending the currency to its weakest against the dollar in two weeks.

In early trade the domestic currency reversed some of Wednesday’s losses following a brief spike to R13.37 to the dollar after President Cyril Ramaphosa announced that the ANC would back the expropriation of land without compensation vote.

Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said although many argued that this was merely a political ploy to gain the upper hand over the EFF, the potential implication for financial markets, food production and economic growth could not be denied as uncertainty once again hovered over the economy.

“We will keep a close eye on the political developments locally as the land debate continues nationwide,” said Botes.

At 5pm the rand bid 20cents weaker than Wednesday’s same time bid at R13.40 to the greenback.

Against the pound, the rand was 15c weaker at R17.46 and to the euro the currency eased 16c to R15.56.

Investec chief economist Annabel Bishop said with the more hawkish tilt in the FOMC’s tone currently pricing into the market, the rand on a near-term basis could move towards R13.50 to the dollar.

“Indeed in the remainder of this year’s third quarter the risk of depreciation towards R14 a dollar remains. Volatility will likely persist,” Bishop said.

TreasuryOne senior currency dealer Andre Botha said politics was still the primary local driver of the rand and would most likely continue to be as we head into next year’s elections.

Meanwhile, JSE stocks also took a pounding with the blue chip JSE Top40 index declining 1.83percent to 50340.48 points, while the broader all share index gave up 1.62percent to 56470.72 points.

Leading losses among major movers were Brait, which sank 4.31percent to R41.50, followed by Vodacom, which dropped 4.27percent to R130.70.

Shoprite declined 3.48percent to R209.02, while Coronation Fund Managers was 3.38percent lower at R57.78.

Top gainers were Impala Platinum, which scored 3.32percent growth to R19.89 and Assore, which ticked up 2.02percent to R278.64.

-BUSINESS REPORT