Rand weaker before next Brexit showdown

South Africa’s rand weakened against the dollar on Wednesday as investors stayed away from riskier assets ahead of another British parliamentary showdown over Brexit.

At 1505 GMT the rand was trading at R14.40 per dollar, 0.42% weaker than its New York close of R14.34 on Tuesday.

Parliament is due to vote at 1900 GMT on whether Britain should leave the EU on March 29 without a deal. Lawmakers are widely expected to reject what would be an economically disruptive move, increasing the possibility of a delay in the departure date.

“We would expect today’s motion for a ‘no deal’ Brexit to be comprehensively defeated,” NKC African Economics said in a note.

“This would lead to a vote tomorrow evening on whether the UK should ask the EU to extend the Article 50 period. We expect this motion to be approved and for the EU to agree to such an extension.”

Brexit ructions have tended to drive investors towards safe-haven assets.

In fixed income, the yield on the benchmark government bond due in 2026 ended 4.5 basis points higher at 8.72%.

Shares edged higher, with the Johannesburg Stock Exchange’s top 40 index closing up 0.24% at 49,584 points and the broader all-share index up 0.23% at 55,829 points.

Libstar Holdings surged more than 13% after the food producer declared a maiden cash dividend despite falling earnings.