#RandReport: Rand, stocks on back foot as dollar rally hits gold

The rand was among the 5 worst performers in a basket of emerging market currencies monitored by Reuters.

Picture: EWN.

JOHANNESBURG - The rand fell as much as 1.7% against the dollar on Wednesday, as heightened bets on a US interest rate hike next month lifted the greenback against emerging market currencies.

Stocks eased with bullion producers on the back foot as spot gold prices slid to nine-month lows.

The rand stumbled to a session low of 14.3000/dollar, and was not far off that at 14.2700 by 15.58 GMT, down 1.57% on the day.

The rand was among the five worst performers in a basket of emerging market currencies monitored by Reuters, including the Hungarian forint, Colombian peso, Brazil’s real and the Russian rouble.

“It’s basically the US dollar pushing stronger and US Treasuries spiking again,” Treasury One currency trader Andre Botha said.

“People are expecting more interest rates hikes from the US so they are positioning themselves for that and that has been emerging markets negative.”

South Africa’s own central bank is set to hold its repo rate at 7% on Thursday and through next year, according to a Reuters poll.

On the stock market, mining shares led losses on the bourse as the gold spot price fell more than 2% and platinum shed 1.9% on a dollar rally sparked by strong US data.

Impala Platinum shed 5.25% to R47.4, AngloGold Ashanti fell 3.65 percent to R152.0, Sibanye Gold dropped 2.47% to R31.21 and Gold Fields fell 2.40% to R43.1.

Advancers included South Africa’s biggest consumer foods maker, Tiger Brands, which rose 2% to R392.24 after reporting a 19% rise in full-year profit.

In fixed income, yields climbed higher across the curve, with the 10-year benchmark adding 2.5 basis points to close at 8.99%.