Rand gains as dollar rally eases, stocks lower

The rand bounced back over 1% on Wednesday as the dollar fell from nearly seven month highs seen on Tuesday.

Stocks fell for another session as emerging market stocks fell to five month lows.

At 1516 GMT, the rand was up 1.16% to the dollar at 12.55.

The greenback eased off its recent rally as first quarter GDP growth data released on Wednesday was at 2.2%, lower than forecast.

The dollar was down 0.50%.

“The rand has been quite resilient against its emerging market peers because our fundamentals are looking a bit better,” said Andre Botha, currency trader at Treasury One.

Botha said that April trade data being released on Thursday was expected to be upbeat and positive for the rand. The trade balance was in surplus for the previous two months.

The yield for the government bond due 2026 was barely changed, up 1 basis point to 8.540.

Stocks ended lower, extending the losing streak to the third straight session in line with emerging markets peers as investors fret over Italy’s political crisis.

The benchmark JSE Top 40 Index fell 0.7% to 49 287 and the broader All Share Index was off 0.6% to 55 601.

Among movers, Gold Fields lost 2.4% as the price of bullion faltered. On the upside, Spar and Nampak gained 2.3% and 2.9%, boosted stronger earnings reports.

Source: moneyweb.co.za