The South African Rand stabilized against the dollar Tuesday, find your bearings after a sharp fall last week when sentiment towards the risk-sensitive currency collapsed.
At 8:44 p.m., the rand was trading at 15.81 against the dollar, down a modest 0.75% on Monday close.
the rand lost more than 6% against the US currency last week due to factors, including severe power outages by distressed state utility Eskom, deadly flooding in an economically important province and comments from the US Federal Reserve suggesting an aggressive rate hike outlook.
Analysts had warned that the South African currency, which some investors use as a proxy for commodities exhibition, watched overvalued before his recent fall.
“The drastic and abrupt weakening is unlikely to continue. The possibility of the US Fed disappointing at its next rate meeting in May would support the rand,” DG Capital Forex said in a research note, predicting a range of 15.00 to 15.75 rand for a short dollar. term.
Stocks recovered from the previous day’s rout, but Lukman Otunuga, senior research analyst at FXTM, warned investors were cautious as fears over the impact of new lockdowns in China linger in the air.
“Caution will likely remain the name of the game this week with fragile sentiment as tough lockdowns in China, concerns around a global slowdown, Fed rate hike fears and geopolitical risks leave investors jittery,” added Otunuga.
The Johannesburg All Share index gained 513 points or 0.74% to 70,264 while the Top-40 index rose 0.7% to 63,336.
Commodity stocks rallied, with the mining index up 1.07%, as gold rose from a pullback to a more than a month low in the latest session. Palladium, used primarily in vehicle exhaust to reduce emissions, is also recovered.
The government’s benchmark 2030 bond was slightly firmer, with the yield falling 3 basis points to 9.88%.