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JOHANNESBURG - The rand weakened in late trade yesterday, as investors fretted over global risk events such as the fallout from Germany’s election and tension between North Korea and the US.

At 5.47pm, the rand traded at R13.39 to the dollar, 0.37% weaker than its New York close on Monday.

Demand for the rand stalled after the SA Reserve Bank’s surprise decision last Thursday to keep lending rates on hold after cutting by 25 basis points at its July meeting.

“Sentiment towards the rand is still fragile and will only be restored if USD/ZAR and EUR/ZAR can hold below (R)13.40 and (R)16.00 this week,” Rand Merchant Bank currency analyst, John Cairns, said.

Cairns said the immediate threat to the rand was risk aversion amid an escalating war of words between North Korea and the US, German Chancellor Angela Merkel’s “uninspiring” win in the election and problems facing US President Donald Trump’s healthcare reform bid.

In fixed income, the yield for the benchmark government bond due in 2026 rose.

On the bourse, the benchmark Top40 index was down 1.5% at 48819.35 points, while the broader all share index shed 1.4% to 55070.38 points.

The JSE was closed for trading due to a public holiday on Monday and the local bourse had to play “catch-up” after the events of the weekend, said Cratos Capital equities trader, Greg Davies.

Naspers was down 3.19% at R2867.59, following the fortunes of its largest investment - China’s Tencent Holdings. “Tencent is down more than 3% since we last traded,” said Davies.