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South Africa's rand extends losing streak, stocks inch up

06/14/2021 | 11:51am EDT
A street money changer counts South African Rands in Harare

LONDON/JOHANNESBURG (Reuters) -South Africa's rand extended its losses on Monday as traders continued to cash in some of their gains on 2021's top performing emerging market currency.

A fifth drop in six sessions left the rand down 0.42% at 13.73 to the U.S. dollar at 1445 GMT. It kept it almost 2.5% off its recent 28-month high.

Analysts at Morgan Stanley said in their latest emerging market note that they were now backing alternative currencies such as the Russian rouble instead.

"We believe that most of the positive news in South Africa is in the price and the rand's risk premium is now one of the lowest across EMFX," they said.

As well as a general pull-back in FX markets over the last week, South Africa has officially declared its third wave of COVID-19 infections and is Africa's worst-hit country.

Over the weekend, President Cyril Ramaphosa urged the world's richest countries to help finance the World Health Organization's COVID-19 testing, diagnostics and vaccines programme.

"If all G7 countries met their fair share target, this initiative would be two-thirds funded - and it would be 90% funded if all G20 countries made their fair share contributions," Ramaphosa said.

A global rally in bonds has been good for South Africa's government bond market. On Monday the yield on the benchmark 2030 issue, which moves inversely to its price, was just above a 3-1/2 month low at 8.675%.

Stocks on the Johannesburg Stock Exchange (JSE) inched up on Monday in tandem with other global indexes but investors stayed cautious ahead of the U.S. Federal Reserve meeting this week to get a steer on inflation.

The benchmark all-share index went up 0.32% to end at 67,941 points while the blue-chip index of top 40 companies ended up 0.34% at 61,654 points.

Mining and commodity companies were a loser on the day when most of the sector indexes went up with the resources index closing down 0.29%.

(Reporting by Marc Jones and Promit Mukherjee; Editing by Catherine Evans and Jonathan Oatis)

By Marc Jones

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX -0.01% 525.76 Delayed Quote.-0.80%
DOW JONES SOUTH AFRICA(ZAR) 0.00% 1917.51 Delayed Quote.8.72%
EURO / SOUTH AFRICAN RAND (EUR/ZAR) 0.07% 17.3278 Delayed Quote.-3.42%
MORGAN STANLEY -0.31% 95.98 Delayed Quote.40.06%
S&P AFRICA 40 INDEX -0.14% 169.95 Delayed Quote.-1.87%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.04% 73.095 Delayed Quote.-0.78%
US DOLLAR / SOUTH AFRICAN RAND (USD/ZAR) 0.05% 14.60327 Delayed Quote.-0.74%
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