UPDATE 1-South African rand recovers from four-month low

  • Reuters
  • Forex News
UPDATE 1-South African rand recovers from four-month low
Credit: © Reuters.

(Updates to reflect afternoon trade)

JOHANNESBURG, Feb 21 (Reuters) - The South African rand recovered from a four-month low on Friday as the U.S. dollar fell on weak survey data, but traders were cautious before a closely watched budget speech next week.

At 1555 GMT the rand ZAR=D3 was around 0.9% stronger at 14.9850 per dollar, after earlier falling to 15.1900, a level last seen in late October.

The dollar slumped after a survey of purchasing managers showed U.S. business activity in the manufacturing and services sectors stalled in February. rand had been under pressure this week because of fears over the spread of coronavirus and concerns over the country's stretched public finances.

Finance Minister Tito Mboweni is expected to raise personal income and excise tax to try to contain the fiscal deficit at a budget review on Feb. 26, a Reuters poll found on Friday. at Nedbank CIB wrote in a research note that the rand could weaken to 16.00 versus the dollar by mid-year, partly due to a potential trade shock with China.

Like peers around the world, South Africa's stock market slipped on Friday on coronavirus fears.

The Johannesburg Stock Exchange's Top-40 index .JTOPI closed 0.87% lower at 51,582 points, while the All-share index .JALSH fell 0.79% to 57,336 points.

On the blue-chip index, gold stocks rose as investors looked for safe havens. AngloGold Ashanti ANGJ.J , up 6.56%, topped the index, also bolstered by a 72% rise in earnings. retailer Woolworths (ASX: WOW ) WHLJ.J and Bidvest Group BVTJ.J fell after both delivered bad news on Thursday. Bidvest was down 5.69% following a profit warning, while Woolworths closed 5.21% lower after reporting a drop in profits.

Chemicals company Sasol SOLJ.J also lost over 5% as law firms preparing a class action lawsuit for investors in the firm encouraged shareholders who had made losses on their investment to join the case.

Bonds were slightly firmer, with the yield on the benchmark 2026 government issue ZAR186= down 2.5 basis points to 7.910%.

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