JOHANNESBURG - South Africa’s rand retreated on Wednesday ahead of a bank holiday on Thursday, with investors booking profits from the previous session’s rally and closing positions as the dollar bounced back on the latest U.S. and China trade war twist.
On the bourse, MTN Group topped the decliners on the Top-40 index after the continent’s biggest mobile operator reported a 7 percent drop in half-year profit.
At 1500 GMT the rand was 0.6 percent weaker at 13.4150 per dollar, having fallen to a session low of 13.4800 after a firm start to the day that saw it test the 13.20 level before losing steam.
Retaliatory trade tariffs by China lifted the greenback a mild boost, clearing out remaining rand bulls weary of sharp moves in low liquidity conditions with Johannesburg Stock Exchange closed on Thursday for the Women’s Day holiday.
China’s commerce ministry said it would impose additional import tariffs of 25 percent on $16 billion worth of U.S. goods, ranging from oil and steel products to autos and medical equipment.
The rand has traded below the crucial 13.50 support for the whole week, but made little progress in breaking the 13.20 resistance, preventing traders from taking any major positions with the lack of clear momentum in either direction.
Bonds were flat, with the yield on the benchmark paper due in 2026 unchanged at 8.69 percent.
In the equities market, the Johannesburg all-share index was slightly up 0.14 percent to 57,786 points, while the top-40 index inched 0.07 percent higher to 51,615 points.
Following the release of its negative half-year numbers, MTN shares fell 8.11 percent to 104.85 rand.
Construction firm Aveng surged 12.50 percent to 9 cents after its rival Murray & Roberts withdrew plans for a potential merger with it.
Shares were also driven by announcements that Aveng will go through with its early bond redemption as soon as possible in order to reduce its debt burden and improve liquidity.