Rand slips as global risk rally slows
JOHANNESBURG – The rand slipped on Tuesday, surrendering the previous session’s scant gains as the dollar steadied from a sell-off triggered by fears the United States economy is heading for recession.
The rand was 0.07% weaker at R14.3200 per dollar at 0645 GMT, compared to a close of R14.3100 overnight in New York.
On Monday, the rand gained nearly 2% in a broad emerging market rally sparked by renewed fears that economic growth in developed markets was set to contract after an inversion of the US yield curve and poor manufacturing data from Germany and Japan.
But the rally lost steam in early trade as investors banked profits, with ongoing chaos around Britain’s exit from the European Union cooling global risk demand.
British lawmakers are due to vote on a range of Brexit options on Wednesday.
Locally, with no top tier data due, investors are waiting for Thursday’s central bank monetary policy decision.
A Reuters poll last week forecast the bank will leave lending rates unchanged 6.75%, with inflation trending around 4 percent, supporting bids for the rand.
Bonds weakened slightly, with the yield on benchmark 2026 paper adding 0.5 basis points to 8.715%.