JOHANNESBURG - The Rand staged a late-session rally yesterday away from six-month lows as investors took profits on the dollar’s recent rally and positioned for a run lower by the rand, while bonds were firmer and stocks traded sideways.
At 5pm, the rand bid at R13.6247 to the dollar, 22.53c stronger than at the same time on Monday, further away from the six-month trough of R13.8025 reached on Friday as pressure from potentially fast-rising lending rates in the US put pressure on emerging markets.
“The rand is tracking other emerging currencies. There haven’t been much flows from offshore but this is a normal market retracement as the market seems to have been caught a touch long,” said Standard Bank currency trader, Oliver Alwar.
A firmer gold price also aided the rand’s bounce from its worst levels since April, but Alwar said the rally would be short-lived and the currency would likely approach the R13.95 technical support mark this week.
In bonds, the yield on the benchmark paper due in 2026 fell shed 10.5 basis points to 8.685percent. Stocks were barely changed as shares which earn most of their revenue abroad weakened as the currency strengthened, holding back further gains on the bourse. The benchmark JSE Top40 index ticked up 0.08percent to 51362.73 points while the all share index lifted 0.17percent to 57629.93 points, at a record close.
Gains on the bourse were curbed by rand-hedged stocks, which make the bulk of their revenue outside the country and tend to weaken as the currency strengthens. Mediclinic retreated 1.76percent to R121.63, while Richemont lowered 0.66percent to R124.15.