Resurgent dollar hits rand, stocks edge up

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November 17, 2015 9:24 AM

At 0700 GMT the rand edged 0.32 percent lower to 14.3675, reversing a drop to a new record low of 14.4400 on Monday triggered by heightened global risk aversion in the wake of Friday's Paris attacks.

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

South Africa's rand weakened against the dollar on Tuesday as investors turned their focus from the Paris attacks to growing expectations of a December rate hike by the U.S. Federal Reserve.

Stocks opened slightly higher, with the JSE Top-40 index adding 0.6 percent to 46,634 points.

"The risk of ongoing dollar gains remains a major risk to U.S. dollar/rand. In this regard it's interesting to see that speculators have taken their long dollar positions to the highest level in two years,"Rand Merchant Bank currency strategist John Cairns said

Investors will watch U.S. consumer price data later in the day for more clues on whether the Fed will raise borrowing costs as early as next month, which would be the first official hike in nearly a decade.

On the fixed income market, government bonds were stronger, with the yield on the benchmark paper due in 2026 shedding 2.5 basis points to 8.580 percent.

Early movers on the stock exchange included telecoms operator MTN which fell 3 percent as it continues its negotiations with Nigerian regulators over a $5.2 billion fine.

Financials were on the front foot with Old Mutual, Discovery and Investec all up nearly 2 percent.

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