South Africa's rand firms in tentative trade ahead of budget
(Adds latest prices, analyst comments)
JOHANNESBURG, Oct 26 (Reuters) - South Africa's rand
strengthened slightly on Monday in tentative trade ahead of a
budget speech in which the finance minister is expected to
detail the impact of COVID-19 on an economy that was in
recession and heavily in debt before the pandemic struck.
At 1600 GMT the rand was 0.08% firmer at 16.1800
per dollar compared to an opening level of 16.2275. The unit
spent most of the session hovering above 16.3000, but
strengthened after New York trading commenced.
The early weakness was caused by lingering investor concerns
about surging coronavirus cases in Europe and the United States
and a lack of progress toward a U.S. stimulus package, but the
currency's high yield kept bulls in play, especially with the
key 16.00 technical level on the horizon.
Economists polled by Reuters last week found the fiscal
deficit was set to widen more than projected in June's emergency
COVID-19 budget, while falling tax revenues following job losses
and lower household expenditure would mean a slower return to
"Consternation – a most fitting description of market
positioning ahead of the mini-budget on Wednesday and
highly-contested U.S. elections on 3 November," said market
analyst at RMB, Nema Ramkhelawan-Bhana.
"Despite the whirlwind of risk, EM assets are trailblazing
... A situation which could be tested depending on the outcome
of the MTBPS (Medium Term Budget Policy Statement."
Stocks fell as surging coronavirus cases darkened the global
The benchmark All-Share index closed 0.81% lower at
54,891 points and the Top-40 index fell 0.80% to 50,287
Among the biggest decliners, retailer Steinhoff holdings
shares fell 3.49% to 83 cents and pharmacy group
DisChem weakened 4.32% to 18.62 rand.
Government bonds strengthened slightly, with the yield on
the instrument due in 2030 down 0.5 basis points at
(Reporting by Mfuneko Toyana and Tumelo Modiba; editing by
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