Rand regains some ground as dollar rally fades

The rand recovered on Friday, tracking peers like the Turkish lira and Russian rouble as the dollar weakened and investors looked to profit on the greenback’s recent rally.

At 1516 GMT the rand was 0.28% firmer at R13.58 per dollar compared to a session low of R13.70.

The currency made some small initial gains overnight following President Cyril Ramaphosa’s state of the nation speech on Thursday, before falling back again as offshore factors continued to overshadow local issues.

The dollar’s surge this week swept aside the risk appetite that had seen the rand rally for most of January all the way to R13.20, and it is now poised for a slide close to R14.00 per dollar as worries over global growth trump an easing in local constraints.

“It’s been a docile day for EM’s in general with only the lira outperforming. The dollar has backed off a bit from its highs so I’d put the rand’s move down to that,” said currency trader at TreasuryOne, Andre Botha.

“If it closes above the R13.70 in the session that opens up the scope for a run to R13.90,” said Botha.

Meanwhile bonds were flat, with the yield on the benchmark 10-year paper down 0.5 basis points to 8.65%.

The Johannesburg Stock Exchange slipped, with its top 40 index down 1.41% to 47,001 points and the broader all-share index down 1.2% to 53,244 points.

Miners were the biggest winners, with Sibanye-Stillwater rising 8% to lead the index upwards, despite news that the company’s latest effort to end a damaging strike at its gold operations had been unsuccessful.

It was followed by Lonmin, also up 8%, African Rainbow Minerals, Impala Platinum and Kumba Iron Ore, all up between % and 5%, with Harmony Gold also up 2.7%.

Lonmin on Friday maintained its revenue, cost and capital spending guidance for the full year, although it also reported lower production.

Meanwhile, Harmony Gold said it expected earnings per share to be substantially lower for the first half of 2019 but higher production had made a substantial contribution to its free cash flow.

Impala Platinum also said it expects higher sales for the first half of the year.