DURBAN – The rand traded within a tight R14.73-to-R14.86 range on Monday after posting sustained gains over the most recent sessions, the momentum seemed to be with the local unit as it breached the sub-R15/$ level on Friday.
Research Analyst at Nedbank CIB Reezwana Sumad said the local unit encountered sustained support throughout the session after breaching the sub 15 level and posted significant gains to reach a best level of 14.755 by the time of the local close.
Sumad said this move was primarily attributable to the positive market outlook regarding trade talks between the US and China thus far as the movement gained momentum as some of those with long dollar positions also exited their positions.
“The current level of the local unit is likely to attract some dollar buying interest, technically, an attempt on R14.60 remains a likely scenario,” said Sumad.
Chief economist at Investec Annabel Bishop said global growth perceptions remained a key driver for emerging market currencies, with rand volatility likely to remain in force.
“Retracing somewhat from earlier gains, the domestic currency has weakened further today. The US dollar lost some ground in the second half of last week, with markets calming on gains seen in US-Sino trade talks,” said Bishop.
At 5pm the rand was bid 2 cents marginally weaker than the same time’s bid on Friday at R14.81 against the dollar. Against the pound it was 7c stronger from R18.73 and bid the same at R16.31 against the euro.
JSE stocks were dragged into negative territory with the blue-chip Top40 index declining 0.59 percent to 49 110.74 points, while the broader all share index gave up 0.57 percent to 55 219.21 points.
The biggest earners were Vivo Energy which gained 3.60 percent at R23 followed by Goldfields with 3.54 percent at R83.76 then PSG Konsult with 3.53 percent at R8.80 while Royal Bafokeng Platinum increased by 2.4 percent to R42.70 and Zambezi Platinum by 2.4 percent to R79.68.
The biggest lossers were Kumba Iron Ore which shed 6.09 percent to R364.50 followed by Motus Holdings dropping 4.78 percent to R69.49 while Imperial decreased by 4.35 percent to R52.50 with African Rainbow Minerals losing 3.76 percent at R140.59 and Exxaro losing 3.63 percent to R116.40.