adminJohannesburg — South Africa’s rand weakened against the dollar yesterday as investors turned their focus from the Paris attacks to growing expectations of a December rate hike by the US Federal Reserve.
Stocks opened slightly higher, with the JSE Top 40 index adding 0.6 percent to 46,634 points.
At 07h00 GMT the rand edged 0.32 percent lower to 14.3675, reversing a drop to a new record low of 14.4400 on Monday triggered by heightened global risk aversion in the wake of Friday’s Paris attacks.
“The risk of ongoing dollar gains remains a major risk to US dollar/rand. In this regard it’s interesting to see that speculators have taken their long dollar positions to the highest level in two years,” Rand Merchant Bank currency strategist John Cairns said.
Investors will watch US consumer price data later in the day for more clues on whether the Fed will raise borrowing costs as early as next month, which would be the first official hike in nearly a decade.
On the fixed income market, government bonds were stronger, with the yield on the benchmark paper due in 2026 shedding 2.5 basis points to 8.580 percent.
Early movers on the stock exchange included telecoms operator MTN which fell 3 percent as it continues its negotiations with Nigerian regulators over a $5.2 billion fine.
Financials were on the front foot with Old Mutual, Discovery and Investec all up nearly 2 percent. — Reuters
derick.khumalo