Views Article – Sharenet Wealth

Africa, Forex

South African rand slips further as flight to safety continues

(Updates rand, adds stocks)

JOHANNESBURG, July 20 (Reuters) – South Africa’s rand slipped further on Tuesday, as the fast spread of the Delta coronavirus variant made global investors nervous and drove a continued flight to safer assets.

At 1605 GMT, the rand traded at 14.6275 against the dollar, roughly 0.2% weaker than its previous close as the U.S. currency struck a three-month high.

The rand is highly susceptible to swings in sentiment on global markets.

Investor appetite has been knocked by fears that the more infectious Delta variant could harm a global economic recovery from the COVID-19 pandemic.

Soon the local focus will shift to the South African Reserve Bank’s (SARB) interest rate decision on Thursday.

A Reuters poll published last week predicted that the bank would keep its repo rate on hold at 3.5% as it looks through temporary high inflation and to support the economy.

Shares on the Johannesburg Stock Exchange recovered on Tuesday after a sell-off a day earlier.

The All-share index rose to 65,725 points, a gain of 1.42%, led by banks and mining companies. The blue-chip Top-40 index ended up 1.48% at 59,668 points.

The banking index ended up 1.18% and mining index up 2.56%. The yield on the benchmark 2030 government bond was flat. (Reporting by Alexander Winning and Promit Mukherjee; Editing by Giles Elgood)

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