Rand hits week best, stocks fall

The rand firmed more than one percent to its strongest level in over a week on Wednesday as the US dollar was knocked back by an acrid presidential debate.

At 1500 GMT the rand was 1.65% firmer at R16.68 per dollar, its best since last Tuesday. Most of the gains came as New York trade opened and investors digested the first debate between President Donald Trump and rival Joe Biden.

“The fallout during the presidential debate made markets all too aware that political risk, and instability, aren’t off the table in developed markets,” said Bianca Botes of Peregrine Treasury.

Uncertainty over the outcome of the presidential election remained high after the chaotic encounter, dimming some of the recent demand for the safe-haven greenback.

Lower local price growth, which slowed to 3.1% year-on-year in August, and a wide trade surplus of $2.3 billion, also helped demand for the rand following Tuesday’s torrid unemployment figures showing 2 million jobs lost in the second quarter.

“The slight fall in South African inflation is likely to be followed by subdued inflation rates over the next few months. Even so, the Sarb’s easing cycle has now come to an end,” said Virág Fórizs, Africa analyst at Capital Economics.

The Johannesburg Stock Exchange (JSE) closed in the red as it continued to retrace its steps back on the massive 2% gain it posted on Monday.

Following a global market fall owing to the Trump-Biden debate, the FTSE/JSE all share index was down 0.44% at the closing bell to 54,267 points. The FTSE/JSE top 40 companies index was down 0.55% to 50,042 points.

At close, the yield on the benchmark government bond due in 2030 was down 4 bps at 9.445%.