ANGLOPLAT:  46,909   -867 (-1.81%)  20/10/2018 00:00

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 developed markets.

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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