JOHANNESBURG – South Africa’s rand inched weaker on Wednesday, pausing an advance that has seen it march to a one month-and-a-half best as investors took profits on a rally sparked by bets of a business-friendly outcome to the ruling party’s leadership battle.
At 0645 GMT the rand had slipped 0.07 percent to 13.6570 per dollar, shy of the 13.5650 high touched in the previous session.
Emerging market currencies were knocked by U.S. Federal Reserve chair nominee Jerome Powell signalling the central bank was likely to raise interest rates again next month, boosting demand for the greenback.
The rand took a breather from the rally that has seen it gain close to 3.5 percent since Monday, supported by demand for put options in the forward markets as investors positioned for a Cyril Ramaphosa victory at the ANC’s elective conference.
Derivatives traders said market participants that had been long dollars were being forced to sell the greenback as the rand rallied through pivotal technical points.
In fixed income, the yield for the benchmark government bond due in 2026 was up 1.5 basis points at 9.195 percent.
Stocks opened flat, with the bluechip Top40 index up 0.02 percent.