UPDATE 1-South Africa's rand, stocks slides in risk-off global trade

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand, stocks slides in risk-off global trade
Credit: © Reuters.

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JOHANNESBURG, Jan 27 (Reuters) - South Africa's rand weakened on Wednesday, with caution ahead of the outcome of the U.S. Federal Reserve's monetary policy meeting for market cues and indications of rate cuts by the European Central Bank (ECB) curbing risk-taking by investors.

At 1530 GMT, the rand ZAR=D3 traded at 15.2175 against the U.S. dollar, 1.05% weaker than its previous close.

The rand has in recent sessions taken direction from global market-moving events in the absence of major local data releases, although the pace of COVID-19 vaccine procurement locally remained on investors' radar.

On Wednesday the head of National Treasury said it could cost South Africa between up to 24 billion rand ($1.6 billion) to vaccinate around 40 million people. He did not give details when this would occur. Africa has the highest COVID-19 cases on the continent, with more than 1.4 million confirmed infections. It also has among the slowest vaccine procurement programs among emerging nations, dampening sentiment.

Offshore, investors eyed Federal Reserve chair Jerome Powell's news conference later in the day after the U.S. central bank concludes a two-day policy meeting. Analysts expect the Fed to stick to its ultra-easy monetary policy.

Comments by the ECB in the session, that it had room to cut its deposit rate further, dimmed risk demand. That saw the U.S. dollar =USD rise 0.55% as EM currencies backtracked. ended a touch firmer, with the yield on the benchmark bond due in 2030 ZAR2030= down 1.5 basis point to 8.76%.

On the bourse, stocks continued their retreat from record highs reached earlier in the week. Locally listed gold shares .JGLDX fell 1.47% after global bullion prices were dented by a firmer dollar. Johannesburg All-Share index .JALSH fell 1.78% to 62,785 points after hitting an all time high on Monday. The Top-40 index .JTOPI declined 1.83% to 57,644 points.

Harmony Gold HARJ.J fell 2.60%, Gold Fields GFIJ.J closed 1.88% lower, and AngloGold Ashanti ANGJ.J ended 0.71% weaker.

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