UPDATE 1-South African rand firms against dollar, power cuts cap gain

  • Reuters
  • Forex News
UPDATE 1-South African rand firms against dollar, power cuts cap gain
Credit: © Reuters.

(Updates prices)

JOHANNESBURG, Aug 13 (Reuters) - The rand firmed against the dollar on Thursday as hopes of more economic stimulus in the United States waned, although fresh power cuts in South Africa limited its currency's gains.

At 1500 GMT the rand ZAR=D3 was 0.34% firmer at 17.4050 per dollar, but failed to breach the week's high of 17.3500, while the dollar fell to its lowest in a week against a basket of currencies. lending rates still relatively high in South Africa, despite deep cuts by the central bank, the rand and local bonds have seen investor inflows, but analysts have said these may offer only short-term relief.

"The rand posted meaningful short-term gains yesterday as apparent stop-losses were triggered below 17.5000, and this provided the catalyst for some exporter activity that saw the local unit reach the mid-17.30s," analysts at Nedbank wrote.

"However, it has not been able to sustain these gains. Local markets are likely to be cautious, as Eskom has announced the resumption of stage 2 load-shedding," they added in a note.

State power firm Eskom said breakdowns of some its generating units had forced it to resume countrywide blackouts, or loadshedding, with "stage 2" seeing it slash up to 2,000MW from the national grid.

Stocks were unchanged as investors tried to make sense of speculation that President Cyril Ramaphosa might soon announce further easing of restrictions such as lifting an alcohol ban.

This sustained gains in casino, hotel and beverage firms all week, with City Lodge CLHJ.J up 15.35%, Tsogo Sun Gaming TSGJ.J surging 12.5%, Sun International SUIJ.J 4.95% firmer and spirits and cider maker Distell Group DGHJ.J up 4.26%.

Internet group Prosus PRXJn.J and Naspers NPNJn.J , which make up about 35% of the local market, fell 2.48% and 2.30% respectively, mirroring declines in WeChat parent Tencent 0700.HK even after management tried to soothe concerns about the U.S. banning the app. through its subsidiary Prosus, holds a more than 30% stake in Tencent.

Absa ABGJ.J closed 0.77% weaker, a day after the bank warned its half-year profit could be almost wiped out as a result of the coronavirus crisis. cement maker PPC PPCJ.J fell 2.41% after saying it may consider a rights issue as part of talks about restructuring and refinancing the group. Johannesburg All-Share index .JALSH closed unchanged at 57,419 points, while the Top-40 index .JTOPI ticked down 0.08% to 53,082 points.

In fixed income, the yield on the benchmark government bond due in 2030 ZAR2030= 3.5 basis points to 9.255%.

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

Error: File type not supported

Drop an image here or