#RandReport: Rand backtracks as rally pauses, stocks up

By 15:00 GMT the rand had slipped 0.13% to 13.2725 per dollar, having earlier hit a session best 13.1475.

Picture: EWN.

JOHANNESBURG - South Africa's rand weakened on Thursday, retreating from a one-week high as a plan by the finance minister to pull the economy out of recession and positive mining data were overshadowed by a resurgence of dollar demand.

By 15:00 GMT the rand had slipped 0.13% to 13.2725 per dollar, having earlier hit a session best 13.1475 as technical and momentum indicators prompted investors to buy back into the currency and pocket short profits.

"The ZAR posted substantial gains earlier on. That was expected and indicators point to it being oversold. Gains were also supported by a softening of uncertainty, especially around the SARB's independence," said Halen Bothma of ETM Analytics.

The rand shed nearly 5% in the first two weeks of July after a government watchdog recommended the Reserve Bank's (SARB) policy be changed from inflation-targeting to socio-economic welfare.

The watchdog this week retracted the proposal following court challenges by the central bank governor, Finance Minister Malusi Gigaba and Parliament, easing pressure on the currency.

But on Thursday a dollar fightback wiped away some of the sheen of a 3.6% year-on-year jump in mining production and a Treasury plan that may see government sell-off stakes in state firms to boost revenues.

"We're seeing some broad based dollar buying now and more offshore drivers as the domestic situation has cooled off," Bothma said.

On the stock market, the benchmark Top-40 index was up 0.82% at 47,056 points while the broader All-share index added 0.75% to 53,300 points.

The banking index rose 1.54 % with Capitec Bank Holdings the top performer, climbing 1.95% to R82 while Standard Bank advanced 1.89% to R151.70.

"The yields on our local government bonds came in lower and that has shored up some of the banks," Global Trader's Paul Chakaduka said.

Other big advancers on the day included Murray & Roberts, which jumped 3.27% to R14.53, while Group Five added 3.23% to R19.50.

Government bonds firmed with the yield on the benchmark instrument due in 2026 falling 2 basis points to 8.755%.