JOHANNESBURG – South Africa’s rand extended losses against the US dollar on Tuesday as political tension ended the currency’s recent rally to two-month highs. Stocks rose, with Nampak and Mr Price gaining.
At 23:55, the rand traded at 13.1347 per dollar, 1.06% weaker than its New York close on Monday, as some traders took profits and a failed bid to remove President Jacob Zuma as head of the ruling African National Congress pulled shares lower.
The rand suffered on Monday after Zuma survived the call to step down over the weekend, and it has found little support since.
The rand dipped to a session low of 13.1600 before steadying, but it is expected to come under pressure after failing to consolidate last week’s rally to below 12.95.
“Data risks are moderate today and will build up as the week progresses, but for now the main issue remains making sense of local politics,” John Cairns, a currency strategist at Rand Merchant Bank, said in a note.
The revenue service publishes trade figures for April on Wednesday. Unemployment and new vehicle sales data are due on Thursday.
In fixed income, the yield for the benchmark government bond due in 2026 rose 0.5 basis point to 8.615%.
Stocks ended higher, with the blue-chip JSE Top-40 index rising 0.35% to 47 699 and the broader All-share index adding 0.4% to reach 54 158.
Nampak led the gains, rising 15% to R21.85 after reporting an 8% gain in half-year profit.
Mr Price advanced 4.2% to R152.39, after the discount clothes retailer said it would kept dividends flowing even though it reported its first annual drop in profit in 16 years.
“Mr Price maintaining its dividend is an indication by management that they probably don’t see a deterioration in future prospects,” said Gryphon Asset Management portfolio manager Cassie Treurnicht.
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