South Africa’s rand softened against the dollar on Monday, losing momentum after strong gains that took it to three-month highs on Friday.
Domestic stocks opened slightly higher, with the JSE’s blue-chip Top-40 index up 0,2% shortly after the 0700 GMT start of trade.
The rand has gained nearly 8% against the dollar since falling to 7,2150 in mid-March, advancing to 6,6310 on Friday, its firmest since January 4. By 0702 GMT, it was trading at 6,6518 to the dollar, 0,27% weaker than Friday’s New York close of 6,6340.
Charts suggest the rand needs to pierce 6,62 to post further gains. A breach would open up the January 3 high of 6,55.
The rand has mainly been boosted as investors grow more confident about the global economic recovery and dump low-yielding currencies such as the yen and dollar for high-yielders like the rand.
“The dollar index remains under pressure, and as dollar/rand approaches the lows of its six-month range at 6,55 we are on tenterhooks,” Absa Capital said in a note, adding the next support after 6,55 was at 6,43.
Last week’s manufacturing data pointed to a sustained domestic economic recovery. Mining production data will be released on Thursday and may lend support to the rand if it comes out strong.
Government bonds weakened, with the yield on the 2015 note up 4,5 basis points to 7,725% and that on the 2026 issue up four basis points to 8,665%.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Bonds are likely to be constrained in current ranges if the rand does not gain further, a bond dealer said.
