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Rand weakens as dollar rally continues, stocks lift

Technical indicators show the rand fell more than 3% since 19 March, according to Thomson Reuters data.

money-randjpg

JOHANNESBURG - The rand weakened against a strong greenback on Monday amid persistent risk-off sentiment for emerging markets ahead of the Federal Open Market Committee meeting on Wednesday.

Stocks gained on the back of a weaker rand, with rand hedge shares registering the biggest gains.

At 1500 GMT, the rand traded at 1.01% weaker at R12.4575 per dollar, than its close on Friday.

“The rand weakness is not an isolated move in the emerging markets, as the dollar was broadly bid and gained against other EM’s. It’s mainly due to the risk sentiment in EM’s and the US treasury market. Also markets will react to what the FED says about the monetary policy on Wednesday,” said ETM market analyst Halen Bothma.

Technical indicators show the rand fell more than 3% since 19 March, according to Thomson Reuters data.

The rand looked poised to end April 4.5% weaker - its worst monthly performance since summer 2016.

The South African Revenue Service reported on Monday that South Africa’s March trade balance swung to a R9.47 billion ($762 million) surplus in March from a revised deficit of R603 million in February.

Bonds remained weak, with the yield on the benchmark paper due in 2026 up 0.015 basis points to 8.190%.

The all share index rose 1.39% to 58,252 points while the benchmark top-40 index was up by 1.45% to 51,419 points.

“The rand is pushing up all our heavily weighted stocks. The rand hedges like British American Tobacco, Richemont and dual listers stocks are the ones benefiting,” said BP Bernstein equities trader Vasili Girasis.

British American Tobacco closed at R687.21, up 1.64% while Richemont saw a 0.56% gain to R118.88.

Mondi was one of the positive movers, rising 5.28% to R363.96 after it announced its intended acquisition of an Egyptian industrial bag-maker and intended expansion into the Middle East.

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