Business / Business News

Reuters
1 minute read
30 May 2017
10:23 am

Rand extends losses as stocks are set to open flat

Reuters

In fixed income, the yield for the benchmark government bond due in 2026 rose 4.5 basis points to 8.64 percent.

Rands. File photo.

South Africa’s rand extended losses against the U.S. dollar early on Tuesday, hurt by lingering domestic political tensions and a stronger greenback.

* At 0645 GMT, the rand traded at 13.0500 per dollar, 0.6 percent weaker from its New York close on Monday.

* The currency started the week on the back foot after President Jacob Zuma survived another call from inside the ruling party for him to step down.

* Zuma is facing mounting pressure from African National Congress members, opposition parties and civil society since he sacked respected finance minister Pravin Gordhan in March, triggering credit rating downgrades.

* “Optimism built up over the weekend has faded and the rand still has 20-30 cents to go if all of last week’s outperformance is to be reversed,” Rand Merchant Bank currency strategist John Cairns wrote in a note.

* “Trade has been less volatile than expected, but the U.S. and UK public holidays probably held back bigger moves and so there could be some weekend-related follow-through volatility today,” he added.

* Stocks were set to open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index barely unchanged.

* In fixed income, the yield for the benchmark government bond due in 2026 rose 4.5 basis points to 8.64 percent.