Rand weaker after Moody’s report


At 1536 GMT, the rand was down 0.3% against the US currency at 14.0900 per dollar, heading for a second straight day of losses.

JOHANNESBURG – The rand slipped on Tuesday, as Moody’s warned of risks to the country’s last investment grade credit rating including rising government debt and slow economic growth.

At 1536 GMT, the rand was down 0.3% against the US currency at 14.0900 per dollar, heading for a second straight day of losses.

Markets are sensitive to any pronouncement Moody’s makes on Africa’s most industrialised economy, as a downgrade to “junk” status by the credit agency could trigger a large selloff in South African debt.

Moody’s said in a research note that while the outlook on South Africa’s Baa3 rating was stable, it did not see growth picking up significantly because of constraints like skills shortages and power supply problems.

The rand strengthened to below 14.00 per dollar last week for the first time since late February, as appetite for riskier emerging-market assets was helped by signs of progress in trade talks between the United States and China.

But it has now fallen around 0.8% against the dollar since Friday. Trading volumes are expected to be muted this week ahead of Easter public holidays.

In fixed income, the yield on the benchmark 2026 government bond was flat.

On the Johannesburg bourse, stocks followed international equities markets higher.

The Johannesburg Stock Exchange’s Top-40 Index gained 1.2% to 52,590 points, while the wider All-share Index gained 1.1% to 58,902.

“It’s on the back of positive sentiment on international bourses led by Chinese markets up more than 1% this morning. That followed suit in developing markets,” said FFO Securities portfolio manager Wilmar Buys.

Telecommunications company MTN led the blue-chip index, gaining 3.97% to R101.89. There were also gains for miners like AngloGold Ashanti, which rose by 3.18% to R186.38.

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Source link : https://ewn.co.za/2019/04/16/rand-weaker-after-moody-s-report

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Publish date : 2019-04-16 18:24:14

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