Rand firms after US midterms dent dollar; stocks higher

The rand firmed against a weaker dollar on Wednesday after US midterm elections split Congress, reducing the probability of any major US fiscal policy boost soon.

Stocks recovered marginally from a sell-off killing the elections.

At 1505 GMT, the rand traded 1.04 % stronger at 13.97 per dollar, having earlier hit a session better of 13.88.

The dollar index was down 0.43 %.

“After US election results showed a split relating to the Republicans and Democrats, that could limit Trump’s powers, the dollar has cue and weakened,” said Afrifocus Securities portfolio manager Cheslyn Francis

Domestic data also helped the rand.

Business confidence rose for just a second month in October, bolstered by higher import volumes, vehicle sales and retail sales, a survey through the South African Chamber of Commerce and Industry (Sacci) showed.

“This company confidence rising another month, showing business transactions are brisk, provided positive headwind for the rand and as well fuelled stocks,” Francis said.

The rand has become for the back foot since it was announced in September how the economy had entered a recession.

Bonds firmed, while using yield for the government’s 10-year paper down 7 basis suggests 9.070 %.

On the bourse, the all-share index rose 0.46 % to 54,700 points even though the blue chip top 40 index was 0.36 % higher at 48,295 points.

Banks were 2.3% higher. Retailer Woolworths Holdings rose 5.68% to 56.21 rand while Mr Price was up 4.92% to R248.76.

“Industry has been performing superior right after a cautious sell-off yesterday,” said analyst Ryan Woods.

“Once the results of america midterm elections, we’re needs to see more market certainty.”

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