The rand firmed for a sixth consecutive session on Monday, its longest winning streak in nine months, as less hawkish than expected comments by the US Federal Reserve chair Jerome Powell supported emerging-market currencies.
In his speech at the Jackson Hole symposium on Friday, Powell said the Fed may start easing back on its bond purchases before the end of the year, but it is in no hurry to raise interest rates. The decision to raise rates will be guided by the data, taking into account the risks associated with the Delta variant of Covid-19.
The key takeaway from Powell’s speech is that there is no link between interest rates and stimulus tapering, which indicates that monetary policy will stay accommodative for longer and a shot in the arm for risky assets, said TreasuryONE currency strategist Andre Cilliers.
“The market's renewed risk appetite could see the rand testing a little bit lower in the coming days, but we expect the market to trade cautiously as we head into the back end of the week with the US nonfarm payroll numbers on Friday.”
The rand firmed to its best intraday level in two weeks earlier, according to Infront data. At 6pm, it had strengthened 0.51% to R14.6435/$, 0.55% to R17.2719/€ and 0.46% to R20.1442/£.
Shares in Tiger Brands rose the most in two weeks on Monday after it confirmed that it was selling its 49% stake in UAC Foods Nigeria back to its parent after buying into the business about a decade ago as one of its first forays into the rest of the continent.
Tiger’s shares firmed 1.13% to R185.82.
Naspers and Prosus pulled the JSE lower on the day, with the former down 3.01% to R2,330.01 and the latter 3.51% to R1,204.03.
The JSE all share lost 0.86% to 67,064 points and the top 40 1.05%. Precious metals fell 1.97%, industrials 1.57% and banks 0.65%.
At 6.40pm, the Dow was flat at 35,475 points. In Europe, France’s CAC 40 was little changed, while Germany’s DAX 30 gained 0.22%. UK markets were closed for a bank holiday.
Earlier, the Shanghai Composite gained 0.17%, Hong Kong’s Hang Seng 0.52% and Japan’s Nikkei 225 0.54%.
Gold lost 0.3% to $1,811.62/oz and platinum 0.81% to $1,004.11. Brent crude added 0.29% to $72.79 a barrel.
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