Saturday, September 18, 2021

    South Africa’s rand retreats as dollar surge rattles risk demand

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    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    JOHANNESBURG (Reuters) – South Africa’s rand was weaker on Monday, with yield-seeking investors continuing to back the dollar and move out of riskier emerging-market and equity assets dampened by signs of softening demand in China and rate tightening by the Federal Reserve.

    At 0650 GMT, the rand was 0.56 percent weaker at 14.4000 per dollar, buckling from a two-month best of 13.8700 last week, as the greenback accelerated towards a 16-month high.

    The momentum that saw the rand pierce the crucial 14.00 technical resistance level was short-lived despite local data suggesting the economy was slowly recovering from recession and bets that the mid-term U.S. election results would tame demand for the dollar.

    “From a technical perspective, we recommend keeping an eye on the USDZAR resistance level of 14.40 and the support level of 14.00,” Nedbank analysts said in a note.

    An index tracking consumer staples firms in China showed demand fell, while e-commerce giant Alibaba’s 24-hour online retail frenzy “Singles’ Day showed the event’s annual growth dropped to its slowest rate.

    Concerns about slowing growth in China, which is among South Africa’s largest trade destination, and the impact of the tariff spat between Beijing and Washington have also kept demand for the rand and other EM currency brittle. Bonds weakened, with the yield on the benchmark paper due in 2026 rising 5 basis points to 9.25 percent.

    Stocks were set to open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.06 percent.

    Reporting by Mfuneko Toyana; Editing by Subhranshu Sahu

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