#RandReport: Rand weakens on dollar recovery; eyes on Eskom
At 1533 GMT, the rand traded at 11.9325 per dollar, down 0.65% on the day.
JOHANNESBURG - South Africa’s rand weakened on Monday as the dollar recovered and government bonds sold off, while investors waited anxiously for a results announcement by cash-strapped power utility Eskom on Tuesday.
At 1533 GMT, the rand traded at 11.9325 per dollar, down 0.65% on the day. It gained over 2% against the dollar last week and is up 15% against the greenback since the start of last month.
“Weakness in the rand stems from a slight uptick in the dollar after six weeks of consecutive losses. Markets also seem to be a bit wary in anticipation of Eskom’s financial results tomorrow,” said Bianca Botes at Peregrine Treasury Solutions.
The rand has been one of the best-performing currencies globally since mid-December, buoyed by hopes that the new leader of the ruling African National Congress (ANC), Cyril Ramaphosa, will follow through on promises to root out corruption and kick-start economic growth.
Stronger gold prices and a fall in the US dollar have also helped.
Investors will be looking to Eskom’s interim results for clues on the financial health of one of South Africa’s largest state companies. Ratings agencies regularly cite Eskom as a threat to the country’s already strained public finances.
In fixed income, the yield on the benchmark government bond due in 2026 rose 13 basis points to 8.555%, reflecting weaker bond prices.
South African stocks maintained a technical correction which started last Thursday after momentum indicators showed the main indices had strayed into overbought territory.
The benchmark Top-40 index eased 1.22% to 53,863.76 while the wider All-share index shed 1.28% to 60,806.90.