South Africa's rand heads for weekly loss, Sasol leads stocks higher

JOHANNESBURG: South Africa's rand was set for a weekly loss of more than 2% against the dollar on Friday, as higher bond-market borrowing costs and a rising dollar sapped risk appetite.

Stocks ended higher, led by petrochemical firm Sasol's 14% surge.

At 1725 GMT the rand was 0.13% weaker at 15.3350 against the dollar, trimming losses after hitting a near eight-week low of 15.4100 earlier in the session.

The currency was on track to post losses of 2.2% since Monday.

The currency rallied to a 2021 peak of 14.3950 last week on fiscal consolidation plans laid out by South Africa's finance minister, but it has struggled to gain further as soaring US bond yields sapped enthusiasm for risk currencies worldwide.

The latest bout of volatility was sparked when US Federal Reserve Chairman Jerome Powell on Thursday showed little alarm about the rise in yields.

"Emerging market currencies have felt the pinch globally as the US Dollar reminded currency markets of its power as the world's reserve currency," said DailyFX analyst Warren Venketas.

Powell's speech on Thursday failed to put concerns over rising yields at ease which could lead to the detriment of the rand in the short to medium-term, Venketas added.

South African government bonds have also been hit. The yield on the benchmark 2030 government issue added 18 basis to 9.320%, its highest level since October.

In the stock market, the Top-40 index closed 0.87% higher at 62,788, while the broader all-share up 0.78% at 68,271.

Shares in Sasol were boosted by oil prices, which jumped more than 3% after OPEC and its allies agreed not to increase supply in April as they await a more substantial recovery in demand.