Rand recovers as dollar eases, stocks firm

The rand firmed against a softer dollar on Friday, regaining some ground lost a day earlier when the central bank kept lending rates unchanged in a decision that divided policymakers.

Stocks also firmed, along with emerging market peers.

At 1600 GMT the rand was 0.36% firmer at 14.43 per dollar compared to a close of 14.49 in New York on Thursday.

The rand firmed alongside other emerging market currencies, aided by a weaker dollar.

The dollar edged away from two-year highs on Friday after weak US manufacturing activity data sparked worries that the trade conflict with China may hurt the world’s largest economy and affect the currency’s safe-haven status.

The rand fell on Thursday after the Reserve Bank’s five-member policy committee voted 3-2 to keep rates steady at 6.75%, saying that while inflation and inflation expectations were close to the middle of the bank’s 3% to 6% target range, they had not yet settled there.

Read: Divisions emerge as Sarb holds rates, cuts growth outlook

Investor focus now turn to President Cyril Ramaphosa’s cabinet appointments after his inauguration on Saturday.

Analysts say if Ramaphosa manages to trim a cabinet comprising more than 30 ministers and deputies, as he wants to do, that would be an early sign his fresh mandate has put him in a stronger position to overhaul South African politics.

“The appointment of a cabinet, ….will have a significant bearing on South Africa’s political risk premium and in turn domestic assets. Let’s hope that the market’s optimism regarding a lean and mean ministerial league is not misplaced,” RMB analysts said in a note.

In fixed income, the yield on the benchmark government bond due in 2026 fell by 2 basis points to 8.36%.

On the bourse, the Johannesburg All-Share index rose 0.28% to 54 423 points while the Top-40 index also climbed 0.28% to 48 427 points.

Real estate firm Tradehold topped the gainers, rising 10.87% to R12.75 after full-year results showed headline earnings per share of 8 pence.

Bucking the upward trend was insurer Old Mutual which closed 3.23% to R21 after its chief executive left on Friday due to “breakdown in trust”. 

Read: The investment firm that sunk Peter Moyo to suspension status