JOHANNESBURG - The rand weakened yesterday for a third consecutive session amid worries that a potential global trade war could curb economic growth and metals demand, overshadowing signs locally of an economic turnaround.
At 5pm, the rand bid at R11.9097 to the dollar, 4.33cents softer than at the same time on Wednesday, and edging closer to the R12 technical mark that could open the path for further losses.
Spot prices of precious and industrial metals, such as gold, platinum and iron ore that form a large chunk of the country’s export revenue were all down on the day as investors’ worries over US President Donald Trump’s steel tariff plan persisted.
Gold was down 0.43percent, platinum 0.66percent lower and copper more than 1percent weaker.
Should the rand be able to withstand offshore pressures and close the week below R12, positive sentiment driven by recent signs of an economic revival could see it rally back around the R11.65 resistance level.
In fixed income, the yield for the benchmark government bond due in 2026 was down 2.5 basis points at 8.095percent.
Stocks were mixed, with telecoms group MTN leaping on a new dividend policy, while some mining stocks wobbled in the face of the commodity downturn and disappointing results.
MTN jumped 10.12percent to R135 as it cut its 2018 dividend to trim debt but outlined increases in the next three to five years, lifting sentiment in the firm which some investors had expected to scrap this year’s payout.
Exxaro Resources fell 4.52percent to R121.38 after it reported a sharp drop in full-year earnings because of an impairment.
The benchmark JSE Top40 index nudged up 0.1percent to 52057.14 points, while the wider all share index edged down 0.06percent to 58926.01 points.
Meanwhile, a sense of calm returned to global markets yesterday, as traders took a break from worrying about a global trade war and focused instead on the European Central Bank’s plans to end its stimulus programme.
European, US and Asian share markets all edged up - the first two for a fourth day - after Trump suggested he may spare some key trade partners in his push to introduce protectionist tariffs.