UPDATE 1-South Africa's rand recovers, helped by higher commodity prices

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand recovers, helped by higher commodity prices

* Dollar's recent rally on pause
* Focus on S&P review on Friday
* Stocks slip led by Assore

(Updates with latest prices, analyst quotes)
JOHANNESBURG, May 31 (Reuters) - South Africa's rand firmed
on Tuesday helped by a recovery in commodity prices and as the
dollar's recent rally on expectations the U.S. interest rates
could rise next month took a breather.
Stocks slipped, hit in part by technical factors after the
14-day RSI of the main indices - a momentum indicator tracked by
analysts - strayed into overbought territory, suggesting a
pull-back was on the cards after a strong rally.
At 1545 GMT, the rand ZAR=D3 traded at 15.7455 per dollar,
0.43 percent firmer from its New York close on Monday.
"The dollar has been slightly weaker on global markets and
we have seen a consolidation on commodity currencies, gold is
up, platinum is up, that's why the rand is looking a little bit
better," Bidvest Bank chief dealer Ion de Vleeschauwer said.
"But we are still very much in the ranges between 15.7500 and
The rand was expected to remain in a narrow range as
investors awaited more clues about the timing of an interest
rate hike in the United States and a possible downgrade to South
Africa's rating at the end of the week.
Ratings firm Standard & Poor's was due to review South
Africa's credit rating, currently one notch above subinvestment,
on Friday.
A recent Reuters poll found that S&P and Fitch, also
expected to decide on the sovereign rating in June, would cut
South Africa to "junk" status in 2016.
Meanwhile, the dollar has risen recently on expectations of
higher U.S. rates. Fed Chair Janet Yellen said on Friday that
the central bank should hike rates "in the coming months" if
economic growth picks up and the labour market continues to
On the stock market, the benchmark Top-40 index .JTOPI
shed 0.98 percent to 47,974 while the wider All-share index
.JALSH finished the session 1.04 percent lower at 53,905.
The biggest decliner on the day was iron ore producer Assore
ASRJ.J , which fell 8.5 percent to 160.10 rand.
Chinese steel and iron ore futures posted their sharpest
monthly falls on record in May on weaker seasonal demand, a
renewal of bad news for the sector after a rebound fuelled by
glimmers of optimism over the Chinese economy.
Government bonds were mixed, and the yield for the benchmark
instrument due in 2026 ZAR186= shed 0.5 basis points to 9.385

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or