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South African rand slumps to 2-week low after ANC says no discussions on early Zuma exit
* Rand lowers to 2-week lows
* Stocks dip led by banking sector
(Updates figures at market close)
JOHANNESBURG, Jan 10 (Reuters) - South Africa's rand
weakened as much as 1.7 percent on Wednesday to its worst
performance in nearly three weeks after the ruling African
National Congress said an early exit for President Jacob Zuma
had not been discussed at a party meeting.
It later recouped some losses.
Initially hit by softening demand for emerging market assets
as global bond yields picked up, the rand's losses accelerated
to a session-low 12.55 shortly after the ANC Secretary-General
Ace Magashule told reporters Zuma's removal was not on the
agenda of a meeting of the party's top decision-making body.
It was later 0.87 percent weaker at 12.4450 per
The rand has swung between 12.2275 and the upper 12.50s for
the first two weeks of the year, pushed and pulled by mostly
rumour-fuelled bets of a Zuma resignation before his term ends
"The rand, and markets generally, at the moment have been
very headline driven. And the ANC meeting only ends on Friday so
there will be more headlines and that means rand volatility
should continue," said trader at RMB Jim Bryson.
"It's really difficult to call, it needs to close above
12.52 to get out of these ranges, but a test of around 12.20
cannot be totally discounted," Bryson said.
The rand has rallied since mid-December, supported by
investors' hopes that the newly elected leader ANC head Cyril
Ramaphosa would push through business-friendly policies.
The rally has since stalled, with signs of higher rates in
the United States shifting some of the focus back to
fundamentals, although analysts said a decision on Zuma remained
the main swing factor.
"He (Ramaphosa) is likely to do everything in his power to
reduce Zuma’s influence and to facilitate a rapid end to his
time in power. That is rand positive," said analyst at
Frankfurt-based Commerzbank Elisabeth Andreae.
Bonds tracked the weaker currency, with yield on the
benchmark paper due in 2026 up 7 basis points to 8.655
In equities, the benchmark Top-40 index slipped
0.03 percent to 53,168 points while the All-Share index
declined 0.22 percent to 59,980 points.
The banking sector lowered 1.03 percent while
general retails fell 1.55 percent on lower investors
appetite for emerging markets.
"International invertors are lowering their exposure to
emerging markets," said Cratos Capital equities trader Greg
Nedbank fell 2.32 percent to 254.20 rand, FirstRand
lowered 0.62 percent to 63.00 rand and Barclays Africa
weakened 0.99 percent to 174.46 rand.
Further losses were curbed by the local bullion sector
which lifted 2.05 percent on the back of a jump in gold
prices to its highest level in nearly four months.
AngloGold Ashanti rose 3.62 percent to 133.50 rand
and Gold Fields lifted 0.87 percent to 52.45 rand.
(Reporting by Mfuneko Toyana and Tanisha Heiberg Editing by
First Published: 2018-01-10 14:57:09
Updated 2018-01-10 17:45:33
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