Rand remains on fragile ground

JOHANNESBURG —The rand remained on fragile ground against the dollar yesterday, with scope to revisit the previous day’s record lows as investors fretted about a possible credit rating downgrade for South Africa at the end of the week.

The JSE securities exchange’s Top-40 futures index was flat, pointing to a similar start for the local bourse at 0700 GMT.

By 0652 GMT the rand, which hit an all-time low of 14.4950 versus the greenback in the previous session, was trading at 14.4405, more on less where it ended Tuesday trade.

Traders said investors were focused on tomorrow’s reviews from Fitch, which rates South Africa at BBB with a negative outlook and warned of a possible downgrade in September, and from Standard & Poor’s, which has it at BBB- with a stable outlook.

U.S. jobs data also due out tomorrow could add pressure on the rand if it hardens the case for interest rates in the world’s biggest economy to start rising in December.

“The local unit tested technical resistance around 14.50/dollar (on Tuesday) and further losses seem unavoidable as we approach release of sovereign credit rating reviews and US non-farm payrolls data,” NKC African Economics said in a note.

In fixed income, the yield for debt due in 2026 eased 4 basis points to 8.585 percent. – Reuters

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