Rand gains as dollar dips, stocks up

The rand firmed on Wednesday against a broadly weaker US dollar, even as data showed a recovery in domestic business confidence slowed in September and the country’s biggest trade union group held a national protest.

At 1506 GMT the rand was 0.49% firmer at R16.63 per dollar versus its close of R16.71 in New York.


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The dollar fell as investors considered a possible Democrat victory in the November 3 US Presidential election, and after US President Donald Trump said that he was ready to sign off on some stimulus measures.

“Biden might be the shoo-in to win the presidential vote, but Trump isn’t going to make it easy, as he campaigns in quarantine through social media,” RMB analyst Nema Ramkhelawan-Bhana said in a note.

The rand’s recent, tentative advance against a backdrop of meek local economic conditions has mainly been driven by offshore sentiment, particularly the outlook for further monetary and fiscal stimulus from the world’s main economies.

Markets shrugged off a survey showing South African business confidence continued to show signs of recovery in September, albeit at a slow pace, and a nationwide protest against job losses, wage curbs and corruption cases by the biggest trade union group COSATU.

Stocks on the Johannesburg Stock Exchange recovered early losses, lifted by hopes of an economic aid package in the US, irrespective of who wins the election.

They received a further boost after the central bank deputy governor said an “accommodative” rate stance could be in place for at least the next two years.

The benchmark all-share index rose 0.89% to 54,685 while the bluechip top 40 companies’ index was up 0.97% at the end of the trading day to 50,352 points. Banks and diversified mining indexes were up by 1.5%.

Bonds were weaker. The yield on the 2030 government issue was up 2.5 basis points to 9.575%.

Source: moneyweb.co.za