South Africa's rand weakens in cautious trade, stocks down

JOHANNESBURG: South Africa's rand weakened against the dollar on Monday, before a week packed with market-moving events.

At 1523 GMT the rand was 0.62 percent weaker at 13.7000 per dollar, as it struggled to hold recent gains below the 13.60 technical resistance mark.

"There are several risk events in the week ahead,so the market is a bit cautious," said ETM Analytics analyst Jana van Deventer. "We have the Fed meeting on Wednesday evening and we also have got U.S.-China trade talks that are happening Wednesday and Thursday

U.S. policymakers are expected to signal on Wednesday a pause in their interest rate increases and to acknowledge growing risks to the U.S. economy. That will likely weigh on the dollar.

Investors are also waiting for Chinese Vice Premier Liu He's visit to Washington on Jan. 30-31 for the next round of trade negotiations with the United States.

Government bonds weakened, with the yield on the benchmark bond due in 2026 adding 4.5 basis points to 8.765 percent.

Stocks slipped, with the Johannesburg Stock Exchange's top-40 index down 0.61 percent to 47,600 points and the broader all-share index down 0.52 percent to 53,767 points.

Big banks and retailers led declines on the blue-chip index, with Shoprite, FirstRand, Truworths, Absa and Standard Bank all featuring at the bottom.

Banks and retailers are all sensitive to the health of consumer finances, after a series of poor trading updates from retailers last week.

Clothing and furniture retailer Pepkor, formerly Steinhoff Africa Retail, was down 4.2 percent after a trading update that showed quarterly revenues rose 6.1 percent in the three months to end-December.