Rand slightly firmer; stocks may open flat

South Africa’s rand firmed slightly against the dollar on Tuesday but was seen lacking momentum to push through key levels in the absence of key data locally.

Domestic stocks looked set to open flat, after falling on Monday on news that Zimbabwe wanted foreign firms to sell majority stake to locals within six months.

The JSE’s blue-chip June stock futures contract was up 0,04% before the bourse’s open at 7am GMT.

The rand was trading at R6,8545 against the dollar at 6.32am GMT, 0,3% firmer than Monday’s New York close of R6,8750.

“In the very near term, technicals show that the dollar/rand might remain in a consolidative 6,8150/9100 range. Momentum in any direction is lacking,” said Tradition Analytics in a note.

The rand has gained more than 28% since the beginning of 2009. Deputy Finance Minister Nhlanhla Nene said on Monday the government spent over R50-billion in the past 12 months trying to stabilise the currency.

Absa Capital said given that the strong rand was helping to cushion the impact of higher international oil and food prices on inflation, this may mitigate the extent to which the central bank intervenes in the market over the next few months.

Government bonds were largely unchanged, ahead of a weekly auction at which the government will offer the 2018 and the 2021 government bonds.

The yield on the 2015 bond was down 0,5 basis points to 7,755% and that on the 2026 note was unchanged at 8,935%. — Reuters

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