africa Banking Economy Finance sadc South Africa

Rand weakens on US rate hike expectations

The rand weakened nearly one percent on Monday as the dollar gained on rising expectations of a US interest rate hike, while mining shares were hit by softer commodity prices.

At 1500 GMT today, the rand traded at 15.7670 per dollar, 0.84 percent weaker from its New York close on Friday.

The Federal Reserve will likely tighten policy a bit quicker in 2017 than this year, a top Fed official said on Monday, noting the decision whether to hike in mid-June will hinge on economic data before then.

“The rand will become volatile leading into the (Federal Reserve) meeting in June, where expectations are increasingly towards Fed hiking rates,” Argon Asset Management economist Thabi Leoka said.

The rand gained earlier after the South Africa’s state prosecutor and police said Finance Minister Pravin Gordhan is not being investigated for espionage.

In fixed income, the yield for the benchmark instrument due in 2026 added one basis point to 9.4 percent.

On the bourse, the benchmark Top-40 index was almost unchanged at 46,537 points while the broader All-Share was flat at 52,628 points.

Iron ore producer Kumba Iron Ore dipped 5.9 percent to 86.47 rand while mining company African Rainbow Minerals shed 5.13 percent to 89.24 rand.

Fashion retailer Mr Price bucked the trend, jumping 6.9 percent after it flagged higher full-year profit and declared an increased dividend.

Trade volumes were low, with about 184 million shares changing hands compared to last year’s daily average of 280 million shares.
Source: EWN

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.