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South Africa’s rand steady as dollar struggles, stocks to open lower

South Africa’s rand steady as dollar struggles, stocks to open lowerJOHANNESBURG: South Africa’s rand inched lower early on Tuesday due to profit-taking as the dollar regained some ground after sliding on poor retail sales data.

At 0630 GMT the rand was 0.07 percent weaker at 14.3750 per dollar, down from an overnight best of 14.3250 as its three-session rally ran out of steam.

The rally was sparked by the decision by Moody’s to delay its review on South Africa’s sovereign debt, already seen as a low risk event by investors, and was helped by the greenback’s recent wobbles.

With breathing room building between the 15.00 top and a close below the 14.50 technical barrier in the face of continued uncertainty over the impact of the trade war between Washington and Beijing, traders said the rand could soon test 14.00 mark.

“The technical picture remains biased toward more rand strength especially after yesterday’s break and close below the 14.42 support level and 55-day moving average,” Standard Bank’s chief trader Warrick Butler said in a note.

Government bonds were flat in early trade, with the yield on the benchmark 2026 issue up 0.5 basis points to 9.225 percent.

Stocks are due open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.3 percent.

Supermarket chain Pick n Pay said on Tuesday half-year profit before tax jumped 19.1 percent as price cuts attracted more shoppers to its stores, yielding a 670.2 million rand profit before tax.

Copyright Reuters, 2018

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Source: Brecorder

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