November 15, 2017 / 7:08 AM / in 4 days

South Africa's rand steadies, stocks set to open lower

JOHANNESBURG (Reuters) - South Africa’s rand steadied early on Wednesday, holding on to gains from the previous session as traders who sold the currency and bought the dollar took profits after the currency fell to one-year lows earlier in the week.

A five rand coin is displayed at the South African Mint in a file photo. BANKG REUTERS/ Juda Ngwenya

As of 0634 GMT, the rand traded at 14.3800 per dollar, compared with its overnight close of 14.3700.

The currency slipped to a 12-month low of 14.5750 on Monday as investors fretted about changes at the Treasury and a fee-free university education plan by President Jacob Zuma.

“Fundamentals and technicals do not paint a very good picture for the Rand short to medium term, next week a downgrade looks more and more inevitable,” Standard Bank trader Oliver Alwar wrote in a note.

He added: “Political noise remains and will in the next few weeks intensify heading into the ANC (African National Congress) National Conference.”

The ANC will pick a new party leader to succeed President Jacob Zuma in December. Zuma can remain as head of state until a general election in 2019.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.31 percent.

In fixed income, the yield on the benchmark government bond due in 2026 was down 3.5 basis points at 9.43 percent.

Reporting by Olivia Kumwenda-Mtambo; Editing by Biju Dwarakanath

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