Rand weaker as risk demand fades before Easter

The local currency traded weaker early on Thursday, shifting back above the 14.00 mark with investors closing positions and taking profits in anticipation of low volume ahead of the Easter holidays.

At 0700 GMT the rand was 0.21% weaker at 14.03 per dollar compared to its close of 14.00 overnight in New York, falling alongside its emerging market peers as global risk demand faded.

The rand eked out gains in the previous session after retail sales came in weak but better than forecasts, offering hope the economy could shake off the impact of nationwide power outages over February and March.

The central bank, however, warned late on Wednesday that should the rolling blackouts persist throughout the year, it may knock 1.1 percentage off gross domestic product, leaving Africa’s most industrialised economy facing possible recession.

Read: Load shedding could cut 2019 GDP growth by 1.1 percentage points – Sarb

With local markets closed on Friday and on Monday, liquidity is set to be tight, with the rand likely to struggle to find momentum to drive it significantly below 14.00, traders said.

Bonds were flat, with the yield on the benchmark paper due in 2026 steady at 8.45%.

In equities, the Johannesburg Stock Exchange’s (JSE) Top-40 Index opened weaker, down 0.3% at 52 404 points.

Shares in miner Sibanye were up nearly 2% after the company agreed a wage settlement with The Association of Mineworkers and Construction Union (Amcu) to end a five-month strike at its gold operations.