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Rand firmer as bulls hang in despite Zuma impasse

Stocks open lower, with the Top-40 Index down 1.8%.

South Africa’s rand firmed on Friday, recouping losses from the previous session as investors continued to bet on the ruling African National Congress unseating scandal-plagued President Jacob Zuma in the next few days.

At 0645 GMT the rand was 0.5% firmer at 12.10 per dollar, having slipped to a three-week trough of 12.20 overnight. That was just shy of the 12.22 support mark that analysts say may have triggered some technical selling.

“Should the price instead move to close above R12.22/$, the bearish assumptions would be deemed to have failed,” IG Markets technical strategist Shaun Murison said in a note.

Traders held their nerve and maintained a bullish bias toward the rand, reflected in a narrower spread and relatively high volumes.

A meeting of the ANC’s top decision-making body slated for Wednesday was abruptly cancelled, with leaked comments by a top party official yesterday suggesting Zuma was resisting moves for an early exit.

The official said the party had drawn up plans to remove Zuma from office.

The rand has been among the best performing currencies globally, gaining around 20% since mid-November, with most of those gains achieved after businessman Cyril Ramaphosa was elected ANC chief in December.

Stocks opened sharply lower, with the JSE securities exchange’s Top-40 Futures Index down 1.8%, tracking sharp falls in global equity markets.

In fixed income, the yield for the benchmark government bond due in 2026 was up 2.5 basis points to 8.46%. 

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