JOHANNESBURG – Rand weakened on Monday, giving back some of Friday’s strong gains as investors favoured developed market currencies after the French election result calmed fears the country would follow Britain out of the European Union.
At 0640 GMT the rand had slipped 0.22 percent weaker to 13.4500 per dollar compared to a close of 13.4200 on Friday in New York.
Selling of long dollar positions helped lift the rand away from one-month lows on Friday but those gains faded as firm U.S. jobs data and increasing bets of a victory by centrist Emmanuel Macron in France took centre stage.
Net long positions on the U.S. dollar fell sharply in the latest week through May 2 to their lowest level since early October, according to Thomson Reuters data.
Macron’s resounding defeat of a nationalist who had threatened to take France out of the European Union brought relief to investors who had feared another populist upheaval after Britain’s EU exit and Donald Trump’s election to president last year.[nL8N1I902V]
Traders expect the rand to trade between 13.3000 and 13.6000 on Monday, with 13.40 acting as a likely technical support level.
Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.23 percent.
The yield for the benchmark government bond due in 2026 fell 2.5 basis points to 8.71 percent.
Net foreign reserves rise to $41.728 bln in April
The net foreign reserves rose to $41.728 billion in April from $41.419 billion in March, the Reserve Bank said on Monday.
Gross reserves also increased, to $46.69 billion from $46.588 billion, the central bank data showed.
The forward position, which represents the central bank’s unsettled or swap transactions, edged up to $2.893 billion in April from $2.867 billion in the previous month.