Investor caution over Gordhan saga sees rand weaken
Investor caution over the political row involving Finance Minister Pravin Gordhan sees the rand weakened against the dollar.
|||Johannesburg - South Africa's rand weakened against the dollar on Tuesday, with investor caution over a political row involving the country's finance minister hanging over the markets.
The rand had traded lower by 15:55 GMT, marking its ninth straight daily loss after falling 0.55 percent to 14.4940.
It fell in line with most emerging markets after the dollar was boosted by expectations of the Federal Reserve raising U.S. interest rates this year as attention turns to payrolls data coming out later this week.
Investors were wary as the rand continued to dip after South Africa's ruling party, the African National Congress, renewed its support for Finance Minister Pravin Gordhan, but added that ministers should obey police summons issued during investigations.
Gordhan has declined to meet detectives looking into his time at the tax office in a saga that has roiled local markets.
“Given the uncertainty with local politics, investors are just cautious at the stage with buying into South African assets,” ETM market analyst Ricardo Da Camara said.
On the stock market, the benchmark Top-40 index fell 0.2 percent to 46 819 points, while the All-Share index dropped 0.22 percent to 53 448 points.
Gold, which is sensitive to rising U.S interest rates, fell after Fed officials sounded a hawkish note on interest rates at the weekend, boosting the dollar.
“The weaker rand is not really helping the gold miners and you have that talk of a rate hike causing additional dollar strength,” Vunani Private Clients trader Roberto Pietropaolo said.
Harmony Gold fell 2.18 percent to 53.97 rand, Sibanye Resources weakened 3.04 percent to 58.66 rand, Gold Fields shed 4.36 percent to 7790 rand and AngloGold Ashanti dropped 2.40 percent to 247.00 rand.
Trading volumes were below average, with 228 million shares changing hands compared with last year's daily average of 280 million.
On the bond market, government bonds followed the downward trend in South African assets, with the yield for benchmark 2026 debt rising half a basis point to 8.985 percent.
Reuters