South African rand firmer in scramble ahead of rates decision, stocks sag
* Rand remains firm as short-buying rules
* Amplats gains on bourse, flags much higher earnings
(Adds closing prices)
JOHANNESBURG, July 16 (Reuters) - South Africa's rand
rallied to a new one-month high on Monday, maintaining a
surprise run fuelled by an uncertain dollar trajectory and a
tidy return for investors looking for high yields outside
At 1510 GMT the rand was 0.15 percent firmer at
13.2350d/r, after earlier hitting a four-week high of 3.17, with
technical markers indicating upside momentum ahead of crucial
inflation data and a lending rates decision later in the week.
Since touching the 14.00 mark on June 28 the rand has pushed
through successive technical resistance barriers, and on Friday
closed below 13.25, triggering some technical and short buying
as traders burnt by slides in other EM currencies piled in.
The rand in particular has benefited with the carry trade
offered by low inflation and relatively high lending rates
keeping yield-seeking investors interested, although traders
expect the trend to reverse in coming days.
South Africa's Reserve Bank is expected to hold rates at 6.5
percent on Thursday, according to all 25 economists polled by
Reuters last week..
"From a technical perspective, stochastic indicators are now
moving into the oversold position which suggests that downside
potential is moderating," said analysts at Investec.
Bonds were firmer, with the yield on the benchmark issue due
in 2026 down 2.0 basis points to 8.71 percent.
Shares closed weaker as global peers struggled to maintain a
recent rally in the face of data showing China's economy and
factory production growth had slowed.
The benchmark Top-40 index closed 1.8 percent lower
to 49,338 points while the broader All-Share index shed
1.64 percent to 55,442 points.
Bucking the downward trend, Anglo American Platinum
closed up at 3.5 percent to 368.09 rand after it declared that
it expects first-half profit to increase more than 350 percent,
boosted by improved operational performance and a more
favourable rand basket price for the metal.
(Reporting by Mfuneko Toyana and Nomvelo Chalumbira
Editing by Ed Stoddard and Gareth Jones)
First Published: 2018-07-16 14:51:28
Updated 2018-07-16 17:49:26
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