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Egypt crisis hits rand

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The rand was a touch weaker against the dollar in early Wednesday trade and should remain vulnerable to the impact of the Egyptian crisis on emerging market sentiment, with domestic news taking a back seat.

At 08:38 the rand traded at R7,13 against the greenback, 0,2% softer than Tuesday’s closing level of R7,1155.

“It’s hard to say at the moment where it will go but it looks like the rand is trading a little weaker, but we’ll wait to see what happens when . . . the foreign players come into the market,” said Ian Scott, a trader at Stanlib.

The currency remains fragile after plunging to a four-month low of R7,2015/dollar on Monday as investors spooked by protests in Egypt against the country’s veteran ruler give emerging markets in general a wide berth.

“I think it has affected general emerging market sentiment and we are also in that time zone, so South Africa is definitely feeling the effects of Egypt but we’ll see what happens,” Scott said.

Government bonds edged higher and yields inversely retreated. The yield on the 2015 bond (R157) dipped half a basis point to 7,81% and that on the 2026 note (R186) was three basis points lower at 8,625%.

The JSE’s blue-chip March stock futures contract was up 0,53%, hinting at a fairly positive open for South Africa’s bourse at 09:00. — Reuters

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