Rand inches lower on risk aversion, stocks fall

The rand was slightly weaker against the dollar on Tuesday along with other emerging currencies as demand for risk continued to be subdued globally, while stocks were marginally lower weighed down by gold stocks.

At 15:55 GMT the rand was 0.14% weaker at 14.49 per dollar, a touch softer that its session best of 14.35 reached in earlier as hopes of a de-escalation in the Sino-US tariff war spurred some buying.

“The retreat in global equity markets is not good news for emerging market currencies, the rand included. Technically speaking, the USD-ZAR will run into tough resistance towards 14.70 on the topside,” said Investec in a note to clients.

The rand has traded in a tight range for the last two weeks, dipping below 14.00 last Wednesday only to snap back as the greenback launched a rally that carried it to a 16-month peak.

With no major data releases locally bar Wednesday’s retail figures, traders anticipate an upside push near 14.80 this week and a small chance of the rand testing resistance near 14.20.

Bonds were weaker, with the yield on the benchmark 10-year government paper up 2 basis points to 9.245%.

In equities, the All Share index was 0.29% lower at 52,110 points while the blue chip Top-40 was down 0.21% to 45,833 points.

Gold stocks were 1.15% lower with Africa’s top producer AngloGold falling 0.95%.

“It is still a market driven by negative sentiment overall and the market is a bit directionless at the moment,” said Ferdi Heyneke, portfolio manager at Afrifocus Securities.

MTN bucked the trend, rising 1.44% to 81.04 rand after its CEO Rob Shuter said the company is making progress in resolving a $10.1 billion funds repatriation and tax bill depute with Nigerian authorities and that it was applying for a mobile banking licence in Nigeria.

“There is often going to be buying into that share on any positive news in regards to Nigeria. There is still a lot of uncertainty around them and the market will be waiting for developments,” Greg Davis, equities trader at Cratos Capital.