South African Rand, stocks fall on strong dollar, commodity prices drop

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JOHANNESBURG, Sept. 17 (Reuters) – The South African rand weakened on Friday, reversing some initial gains and was expected to end the week with an overall loss of nearly 3.8% as the US dollar rose and weak data national economies weighed on sentiment.

At 4:10 p.m. GMT, the rand was trading at 14.7400 against the dollar, 1.03% weaker than its previous close.

After three weeks of strong gains, the rand has reversed its direction since Tuesday, rocked by poor domestic retail data, a pullback in commodity prices and a recommendation from investment bank JPMorgan to sell the currency.

The dollar climbed to a three-week high on Friday, continuing to be boosted by strong US retail sales data released on Thursday, rekindling fears that a Fed shrinkage is near. This led to a fall in riskier currencies and an outflow of money from emerging markets. Read more

Markets are now focused on next week’s local Consumer Price Index (CPI) data, South Africa’s central bank decision on interest rates on September 23, and the meeting of Federal Reserve policy on how soon the US central bank will start cutting stimulus.

Shares listed on the Johannesburg Stock Exchange (JSE) continued their steady decline on Friday as investors feared the commodities cycle boom was coming to an end, which could affect South Africa’s foreign exchange earnings.

The drop was further compounded by a fall in Wall Street stocks driven by falling tech stocks and fears of a corporate tax hike in the United States. Read more

The benchmark all-stock index (.JALSH) closed 0.71% lower at 62,862 points, ending the day with a weekly decline of 2.2%, its third consecutive week of decline, which brought the larger index at its level at the beginning of February.

The blue chip index of the top 40 companies fell 0.86% to 56,605 points.

The government benchmark 2030 bond yield rose 7 basis points to 8.985%.

Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee Editing by Mark Potter and David Evans

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