South Africa's rand slides as dollar rebounds; stocks slip

Fri Feb 17, 2017 5:42pm GMT
 

JOHANNESBURG (Reuters) - South Africa's rand retreated on Friday as the dollar gained, following a rally that had lifted the South African currency to a 17-month high. Stocks followed global markets down.

By 1540 GMT, the rand had weakened 0.46 percent to 13.0800 per dollar after closing at 13.0200 overnight in New York.

The dollar index, a gauge of the U.S. currency against a basket of other major currencies, was up 0.4 percent, bolstered by expectations the Federal Reserve will raise interest rates more than once this year.

The rand is expected to remain in the same range before Finance Minister Pravin Gordhan's budget speech on Wednesday. Gordhan is expected to announce new taxes on income, alcohol and tobacco to plug a 28 billion-rand ($2.15 billion) shortfall in revenue.

Bonds also backtracked, with the yield on the benchmark 2026 issue adding 8 basis points to 8.73 percent.

On the stock market, the benchmark Top-40 index was down 0.9 percent to 45,074 points. The broader All-share index fell 0.7 percent to 52,223 points.

Losses were broad-based, with three-quarters of the bourse's blue-chips closing lower.

Drugmaker Aspen Pharmacare was the biggest loser, shedding 2.6 percent to 288.82 rand. The stock had gained 10 percent in the six weeks until Wednesday, but pared gains to 2 percent for the year by Friday's close.

"Some investors were booking profits," said Cratos Capital trader Greg Davies.   Continued...

People chat in front of an electronic board displaying movements in major indices at the Johannesburg Stock Exchange building in Sandton Johannesburg July 9, 2015.    REUTERS/Siphiwe Sibeko
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UK £ USD =1.2543
Euro USD =1.0596
Rand USD =0.0773