Rand softer as Moody's relief rally fades
The rand fell on Tuesday, tracking Asian currencies lower as an uptick in United States manufacturing data lifted demand for the dollar.
JOHANNESBURG - The rand fell on Tuesday, tracking Asian currencies lower as an uptick in United States manufacturing data lifted demand for the dollar.
At 0640 GMT the rand was 0.35% weaker at R14.2150 per dollar compared to a close of R14.1650 overnight in New York, retreating from a 1-week high hit after Moody’s delayed a potential credit rating downgrade.
After the decision, which came late on Friday, the currency rallied more than 3% to it’s best level since March 21, but on Tuesday came under selling pressure as traders who had targeted levels above R14.70 on the short-side exited their positions.
A rebound in US factory activity and a strong increase in construction spending revived hopes the world’s no. 1 economy was not slowing as sharply as previously feared, boosting the greenback and treasury yields.
Another weak South African PMI print, with the measure of factory activity recording a third consecutive decline in March also dampened demand for the rand given the weak economic outlook
Bonds weakened, with the yield on benchmark government paper due in 2026 adding 1.5 basis points to 8.51%.
Stocks were set to open flat after a strong rally in the previous session, with the JSE securities exchange’s Top-40 futures index up 0.05%.