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Rand weakens slightly as rally stalls ahead of weekend

Stocks set to open higher.

JOHANNESBURG – South Africa’s rand eased back early on Friday, ending a recent rally that has lifted the unit to three-week high as developed market currencies came back in favour.

At 0650 GMT the rand was little changed, trading 0.04% weaker at 13.1550 per dollar compared to a close of 13.1500 overnight in New York.

Yield-hungry investors have ignored the political fallout and two credit downgrades to “junk” that followed President Jacob Zuma’s sudden firing of his finance minister in late March.

The local unit is also facing selling pressure as dollar and euro back in favour with some risk concerns easing. Jobless claims and business activity data in the US supported bets that the Federal Reserve will step up rate hikes this year.

The rand is expected to make another push at 13.00 resistance level that could open the door for further gains, traders said.

Stocks were set to open higher at 0900 GMT, with the JSE securities exchange’s Top-40 futures index up 0.46%.

In fixed income, the yield on the benchmark government bond due in 2026 rose 1 basis points to 8.68%.

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