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South African rand firms as dollar slips, stocks dip

05/24/2021 | 11:24am EDT
New South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg

JOHANNESBURG (Reuters) -The South African rand strengthened on Monday as bets on a robust global economic recovery continued to support currencies seen as riskier at the expense of the safe-haven U.S. dollar.

At 1500 GMT, the rand was trading at 13.9200 against the dollar, 0.41% firmer than its previous close.

The rand, up more than 5% against the dollar this year, was benefiting from a rise in commodity prices as well as the U.S. currency's weakness, said Annabel Bishop, chief economist at Investec.

"Absent the global commodity price boom, the rand would not be seeing the degree of strength it has experienced this year against the U.S. dollar," said Bishop.

The dollar languished near four-month lows against major currencies on Monday. [FRX/]

Since the end of March, the greenback has retreated steadily as optimism about the global economic recovery grows. But that move down seems to have slowed as traders begin to anticipate higher U.S. interest rates coming when the U.S. Federal Reserve reacts to signs of increasing inflation.

Government bonds firmed alongside the currency, with the yield on the benchmark instrument due in 2030 down 3.5 basis points to 8.955%.

Stocks weakened with the Johannesburg Stock Exchange's Top-40 Index down 0.25% at 60,057 points while the broader All-Share Index closed 0.28% lower at 66,055 points.

The county's biggest healthcare service provider, Netcare, closed down 1.75% after reporting a 61.9% drop in half-year profit.

Curbing further losses landline operator Telkom rose 4.38% after reporting a 53.4% rise in full-year profit.

(Reporting by Olivia Kumwenda-Mtambo and Tanisha Heiberg; Editing by David Clarke)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BRITISH POUND / US DOLLAR (GBP/USD) -0.02% 1.3754 Delayed Quote.0.53%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.07% 0.79462 Delayed Quote.1.36%
EURO / SOUTH AFRICAN RAND (EUR/ZAR) 0.28% 17.4922 Delayed Quote.-2.35%
EURO / US DOLLAR (EUR/USD) 0.06% 1.17805 Delayed Quote.-3.65%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013436 Delayed Quote.-1.83%
INVESTEC GROUP 2.68% 54.07 End-of-day quote.47.57%
NETCARE LIMITED 1.51% 15.45 End-of-day quote.23.60%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.19% 0.6962 Delayed Quote.-2.91%
US DOLLAR / SOUTH AFRICAN RAND (USD/ZAR) 0.22% 14.8452 Delayed Quote.1.37%
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