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Rand backtracks against firmer dollar, stocks flat

Johannesburg - The rand was weaker in early trade on Tuesday, giving up some of the gains triggered by the easing of global risk aversion driven by higher oil prices.

Stocks were set to open flat, with the JSE's Top 40 futures index inching up 0.16%.

By 08:45 the rand had slipped 0.12% to R15.7360/$, wilting against a greenback boosted by a return of faith in the United States' economic recovery that investors bet will lead to higher interest rates there in 2016.

Bonds were firmer as yields fell, with the benchmark government issue due in 2026 shedding 2.5 basis points to 9.135%.

Despite gaining more than 3% against the dollar in the past two weeks, analysts expect the rand's rally to run into obstacles in the run-up to Finance Minister Pravin Gordhan's budget speech next Wednesday.

"Mr Gordhan will likely present an extremely austere Budget next week," analysts at NKC African Economics said.

"He needs to send a strong signal to rating agencies and foreign investors that South Africa is committed to fiscal consolidation in wake of December's finance minister debacle."

Rating firms Fitch and Standard and Poor's both have South Africa's debt one level above subinvestment, while fellow agency Moody's rates the country two levels above junk, but with a 'negative' outlook.

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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.89
+0.0%
Rand - Euro
20.44
+0.1%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.1%
Platinum
908.75
+1.3%
Palladium
1,014.28
+1.3%
Gold
2,219.42
+1.1%
Silver
24.83
+0.8%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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