eBusiness Weekly
JOHANNESBURG – South Africa’s opened weaker on Tuesday in tetchy overnight trade as caution ahead of inflation data and a lending rates decision by the central bank later in the week curbed big bets.
* At 0650 GMT the rand was 0.11 percent weaker at 14.0500 per dollar, edging down after briefly breaking to a 1-1/2 week best of 13.9200 overnight.
* The rand has battled to hold below the psychological 14.00 resistance level after a rally last week spurred by a dollar plunge and political chaos in Britain that boosted most emerging market currencies.
* With consumer price-growth figures on Wednesday expected to tick higher and the local central bank’s rates decision the day after set to be a close call, the rand has been caught in a thin range with traders resisting big calls.
* “Although risk sentiment favours EM-currency gains, the rand seems to lack the short-term momentum to push meaningfully lower against the majors, as the local market prices for two-way risk ahead of Thursday’s MPC decision,” RMB Nema Ramkhelawan-Bhana said in a note.
* In a Reuters poll conducted last week, 16 of 26 economists said the Reserve Bank would keep its repo rate at 6.50 percent while the rest forecast a 25 basis-point hike.
* Bonds were also weaker, with the yield on the benchmark 2026 government bond up 1 basis point to 9.12 percent.
* Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 1.14 percent. – Reuters Africa
