S.Africa's rand slides as EM rally stalls, U.S. Fed eyed - CNBC Africa

S.Africa's rand slides as EM rally stalls, U.S. Fed eyed

Southern Africa

by Reuters 0

S.Africa's rand slides as EM rally stalls, U.S. Fed eyed. PHOTO: Wikipedia

South Africa's rand edged lower on Monday, ending a recent rally built on positive emerging market sentiment and as traders looked ahead to a U.S. interest rate decision later this week.

Stocks were due to open flat, with the JSE securities exchange's Top-40 futures index inching 0.08 percent lower.

South Africa's biggest fast-food restaurant chain Famous Brands will be in focus after it said on Monday it will take a 51 percent stake in Lupa Osteria, an Italian restaurant business.

By 0640 GMT the rand had slipped 0.21 to 14.4300 per dollar after Friday's close at 14.4000 in New York.

Bonds were flat in early trade, with the benchmark bond due in 2026 unmoved at 9.065 percent.

The rand gained more than 2.5 percent against the dollar last week, breaking through key technical milestones on its way to 5-month highs before stumbling as global appetite for emerging assets eased.

Traders said the rand could resume gains if the Federal Reserve's policy statement was dovish on growth and signalled the bank remained reluctant to raise lending rates.

"A holiday-shortened week will likely lead to a drop in trading volumes, especially today and tomorrow as no major data releases are scheduled," analysts at research firm NKC African Economics said in a note.

"However, U.S. Fed meeting always have the potential to invigorate markets." 

In the previous week the rand twice broke through the 14.2000 technical resistance mark but failed to hold below the level, and is unlikely to make progress this week in low liquidity conditions, traders said.

South African markets will be closed on Wednesday for a national holiday.

 

 

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