The rand powered to its firmest since late August on Wednesday as risk assets rallied despite expectations the Federal Reserve would raise interest rates and draw a line under a decade of accommodative monetary policy.
The bourse was led lower by bullion stocks as gold prices took a hit from dollar gains against other currencies.
At 15:00 GMT the rand was 0.92% firmer at 14.21 per dollar, its strongest level since August 29.
The rand has shaken off the lukewarm reception to President Cyril Ramaphosa’s multi-billion-dollar stimulus plan announced on Friday, rallying with other emerging currencies as global risk aversion subsided.
The small size of the stimulus programme means it is unlikely to have much of an impact, Moody’s told Reuters in an interview a day after Fitch raised similar opinion.
“Investors have begun searching for value in emerging markets, as the degree of risk premium seems to be well embedded in EM assets after the turmoil experienced so far this year in the EM complex,” said Nedbank analysts Mehul Daya and Walter de Wet in a note.
A climb to two-month highs for Chinese shares and talk of an IMF deal for Argentina also helped steady sentiment towards emerging currencies.
In fixed income, the yield on the benchmark government bond due in 2026 fell 5 basis points to 9.065%.
In equities, the broad all-share index was down 0.55% at 56,570.15 points while the top 40 index was 0.59% softer at 50,361.86 points.
The gold index fell 3.25% with AngloGold Ashanti falling the most on the blue chip index, down 2.95% to 124.35 rand.
Gold prices slipped as the greenback strengthened ahead of the results of the Fed meeting.
Shares in Capitec Bank closed 1.87% firmer after the lender reported a 20% rise in half-year profit, helped by strong client growth.
“A very decent set of results. The only concern was that they have not really grown in the lending side of things but the transaction side of business is doing exceptionally well,” said Ryan Woods, an equities trader at Independent Securities.