World Markets

South Africa's rand slips as dollar rises, stocks up

Credit: REUTERS/THOMAS WHITE

South Africa's rand fell more than 1% on Wednesday as the dollar grinded higher, boosted by its renewed safe-haven appeal amid concerns about a second wave of coronavirus infections in Europe.

Updates rand, bonds; adds stocks

JOHANNESBURG, Sept 23 (Reuters) - South Africa's rand fell more than 1% on Wednesday as the dollar grinded higher, boosted by its renewed safe-haven appeal amid concerns about a second wave of coronavirus infections in Europe.

At 1505 GMT the rand ZAR=D3 was trading at 17.0175 per dollar, 1.45% weaker compared to its previous close.

After Britain announced it would impose localised lockdowns in cities showing a resurgence of COVID-19 infections, France and Spain also signalled fresh measures to curb the disease as the Northern Hemisphere enters autumn.]

That put the skids on a relief rally by risk assets following a blow out earlier in the week. Simmering tensions between the United States and China added to risk aversion.

"A combination of events, including a potential of renewed lockdowns in the EU, the international banking saga and Donald Trump's continuous pushing for China to face consequences for the COVID-19 outbreak, gave rise to renewed caution in markets,"

Bianca Botes, executive director at Peregrine Treasury Solutions, said.

"We also saw the dollar gain momentum today as markets turn pessimistic regarding the potential for additional stimulus by the (Federal Reserve), further aiding emerging market weakness."

Bonds also weakened, with the yield on the benchmark 2030 government issue ZAR2030= up 7.5 basis points to 9.49%.

The Johannesburg Stock Exchange (JSE) reversed its six-day losing streak with the benchmark FTSE/JSE all share index .JALSH up 1.84% to end the day at 54,248 points. The FTSE/JSE top 40 companies index .JTOPI closed up 2.04% to 50,127 points.

The rally was led by industrial companies with the JSE's industrial index .JINDI, representing a mixed bag of 25 companies from technology, telecom, retail and healthcare, up 3.26%.

(Reporting by Olivia Kumwenda-Mtambo Editing by Peter Graff)

((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))

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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