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Rand recovers from 2-month low

Johannesburg - The rand made a modest recovery on Tuesday after hitting a two-month low in the previous session and is expected to trade in a narrow range ahead of US employment data later this week.

The rand was at R10.1465/$ at 08:20, down 0.2%t from Monday's New York close but firmer than its R10.2145 trough hit earlier that day.

Fears of a strike by workers at top platinum producers Anglo Platinum [JSE:AMS], Impala Platinum [JSE:IMP] and Lonmin [JSE:LON] have dampened investor sentiment, while a new investment law has also raised concerns.

The government last month allowed bilateral treaties agreed with European nations shortly before the end of apartheid to lapse, to the concern of investors and diplomats who say the replacement law does not offer the same protections .

"The fragility of the rand implies an on-going erosion of real return through high inflation while at the same time there is a need to consider the credit ratings risk that the South African government faces," Tradition Analytics wrote in a note.

"This credit risk is entrenched through continued strike action and more recently the failure by government to allay concern around the cancellation of its investment treaties with major EU countries."

Government bonds were firmer, with the yield on the 2026 paper 5 basis points lower at 8.065% and that on the 2015 instrument down 4.5 basis points at 5.97%.
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Rand - Dollar
18.90
+0.2%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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