Rand flat in early trade
South Africa’s currency is still feeling the ripples of Britain’s decision to leave the European Union.
|||Johannesburg - South Africa's rand was flat on Friday as worries about Britain's shock decision to quit the European Union hit investors' appetite for riskier assets.
On the bourse, stocks were due to open up higher, with the benchmark Top-40 futures index inching up 0.8 percent.
By 06h45 GMT the rand had gained 0.03 percent to 14.7300 per dollar, surrendering some of the gains that lifted it to a one-week high in the previous session after data showed the widest trade surplus since 2010.
Cheered by the unexpected surplus, the rand rallied to 14.6000 overnight, its firmest since last Friday, but failed to break technical resistance around the mark as emerging currencies globally stuttered.
“Attention has turned to the potential monetary policy implications of the Brexit vote,” said currency strategist John Cairns of Rand Merchant Bank.
While dovish comments by the Bank of England on Thursday suggesting the bank would ramp up its bond buying stimulus programme later this year, uncertainty kept investors from making substantial bets.
“The result of the talk is that sterling and the euro have weakened further, while risk assets have managed to scrape some gains,” Cairns said.
Traders said profit taking on the rand after the recent rally would also limit any further gains by the unit.
Bonds were firmer in early trade, with the benchmark government issue due in 2026 cutting 7.5 basis points to 8.765 percent.
REUTERS