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South African rand firms on weaker dollar, focus on GDP numbers, stocks up

Credit: REUTERS/MIKE HUTCHINGS

South Africa's rand firmed on Monday, as a weakening dollar provided many emerging currencies with some breathing space, while stocks also gained.

Stocks up as gold prices continue gains

Updates prices, add stocks, comment

JOHANNESBURG, June 3 (Reuters) - South Africa's rand firmed on Monday, as a weakening dollar provided many emerging currencies with some breathing space, while stocks also gained.

At 1530 GMT, the rand ZAR=D3 traded at 14.4800 per dollar, 0.72% stronger than its New York close on Friday.

The U.S. dollar fell on Monday as President Donald Trump hardened his trade stance toward countries beyond China.FRX/

Trade tensions have taken centre stage in recent weeks as Trump has increased tariffs on Chinese imports, threatened to raise tariffs on Mexican imports and removed preferential trade treatment for India.

"Trade tensions, global growth concerns and monetary policy will remain dominate themes this week," RMB analyst Mpho Tsebe said in a note. "Markets are pricing a higher probability of a (Federal Reserve) cut as trade tensions weigh on the growth outlook."

Locally, investors' focus was on first-quarter GDP numbers due on Tuesday, which are expected to show the economy contracted in the first three months of the year - partly because of power outages.

South Africa's economic growth remains sluggish despite President Cyril Ramaphosa's pledges to woo investment and create jobs since he became president in February 2018.

In fixed income, the yield on the benchmark government bond maturing in 2026 ZAR186= fell by 6.5 basis points to 8.42%.

On the bourse, stocks closed stronger with the broader All-share index .JALSH up 1.14% to 56,286 points, while the blue chips Top-40 index .JTOPI gained 1.26% to 50,213 points.

Leading the Top-40 index was multinational drugmaker Aspen ASPNJ.J up 4.75% to 102.59 rand after announcing that it completed the sale of its nutritional business.

"The money is actually in the bank. The market was a little cross with Aspen because it took them a little longer to get the money they want. So I think it was just a relief that they got that money," said Wayne McCurrie, a portfolio manager at FNB.

Further gains were seen in gold stocks .JGLDX which rose 3.62% as gold prices hit their highest in a 10-week peak, lifting mining companies such as Goldfields GFIJ.J up 3.99% to 68.05 rand and AngloGold ANGJ.Jup 3.610% to 201.70 rand.

(Reporting by Olivia Kumwenda-Mtambo and Onke Ngcuka Editing by Frances Kerry)

((Olivia.Kumwenda@thomsonreuters.com; +27 11 595 2817; Reuters Messaging: olivia.kumwenda.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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