South African rand recovers but still vulnerable
(Adds details, stocks, updates prices)
JOHANNESBURG, June 10 (Reuters) - South Africa's rand
started the week firmer against the dollar, recovering some
ground on Monday after steep losses last week although a number
of economic data releases in the coming days could knock it back
The rand's gains were mostly driven by global factors,
including the United States' decision to shelve plans to impose
tariffs on Mexico and rising chances that the next U.S. interest
rate move will be a cut given lacklustre jobs data last week.
At 1500 GMT, the rand traded at 14.7950 versus the
dollar, around 1.17 percent stronger than its previous close.
Global factors also boosted emerging market equities, to their
highest point in nearly four weeks on Monday.
However, local factors could again pull the rand back again
in the next few days.
After last week's news that the South African economy
contracted by over 3% in the first quarter, investors are now
turning their attention to data releases on manufacturing,
retail sales and business confidence to further gauge the
economy's health, Lukman Otunuga, research analyst at FXTM, said
in a note.
"Should the pending reports fail to meet market
expectations, the rand which is already tussling with domestic
headwinds, may find itself exposed to downside risks," the note
The rand slumped last week following news of the economic
contraction and also amid a row over the central bank's mandate,
which rattled investors.
Government bonds were flat, with the yield on the benchmark
2026 instrument at 8.415 percent.
In stocks, the benchmark Johannesburg Stock Exchange Top-40
Index rose 0.73% to 52,357 points while the broader
All-Share Index closed 0.66% higher at 58,481 points.
The biggest winners were retailers and financial firms,
which also benefited from improved sentiment and the stronger
rand. Retailer Woolworths led the blue-chip index
higher, rising 4.76%, followed by peers like Spar Group
and insurers Old Mutual and Discovery.
(Reporting by Alexander Winning, Emma Rumney and Naledi
Editing by Andrew Cawthorne and Susan Fenton)
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