South Africa's rand slips as dollar gains, stocks firm over 1pc

JOHANNESBURG: South Africa's rand weakened on Thursday, backtracking for the first time this week, as data pointing to an improvement in the US economic outlook lifted the dollar.

At 1500 GMT, the rand was 0.95% weaker at 15.0825 against the US dollar.

In previous sessions, the rand was supported by the global search for yield by investors unsure of the direction of lending rates in developed economies. The currency gained more than 1.5% in the first three days of the week.

But on Thursday, a stronger dollar weighed on the rand.

With no local data due the rest of the week and US non-farm payrolls set for release on Friday, traders expect the rand to trade in a narrow range.

"The USD-ZAR has traded with a topside tilt overnight, with momentum having shifted after the pair was unable to sustain a break below the 14.9000 support level yesterday," economists at ETM Analytics said in a note. "The pair looks comfortable pivoting around 15.0000 for now, and may need a strong catalyst to break out of this pattern."

Stocks firmed, led by consumer facing stocks and banking and financial stocks as investors looked to eased lockdown restrictions to help the retail, restaurant and hospitality sectors.

Leading the gainers, hotel and casino owner Sun International shot up 11.90% and general retailers rose 3.89%, while the financial index increased 2.99%.

Energy and chemicals company Sasol Ltd jumped 4.64%, while mobile network operator MTN Group <MTNJ.J, which has operations in Nigeria, rose 4.50%, benefiting from higher oil prices.

The Johannesburg All-Share index closed the session 1.23% firmer at 63,786 points, while the Top-40 index rose 1.15% to 58,493 points.

In fixed income, the yield on the benchmark 2030 government issue was down 0.5 basis point to 8.45%.