The rand firmed to a five-week high against the dollar as Friday’s disappointing US jobs report continued to support emerging-market currencies on Monday. Activity was, however, subdued with US and Canadian markets closed for a holiday.

The local currency extended Friday’s gains after the dollar weakened on concerns the employment situation in the US could delay the Federal Reserve’s plans to taper its stimulus programme.

The Fed’s stimulus, which was introduced to counter the economic effects of Covid-19, has seen lots of cheap money sloshing around global markets, with much of it finding its way into emerging markets, including SA, due to the higher returns offered in these countries. Once the Fed begins tapering this stimulus, the dollar is expected to strengthen as money is bound to move away from emerging markets back to the US.

“The lower-than-expected increase in payrolls has spurred expectations that the Fed’s plan to taper asset purchases is likely to be delayed to the end of the year, or early next year, instead of at its September meeting,” said RMB economist Siobhan Redford.

At 6.30pm, the rand had strengthened 0.57% to R14.2287/$, 0.83% to R16.8857/€ and 0.68% to R19.6841/£. The euro had weakened 0.13% to $1.1867.

Steinhoff was the biggest loser on the JSE onMonday, with its share price falling the most since mid-March 2020 despite the group receiving support for its proposed global settlement offer which aims to end litigation that threatens the company’s existence.

The company’s shares dropped 21.62% to R2.90, giving it a market cap of R12.38bn.

The JSE all share lost 0.18% to 66,253 points and the top 40 0.12%. Precious metals fell 3.57%, resources 1.57% and industrial metals 0.72%.

Industrials gained 0.88% supported by Naspers and Prosus, both of which have become fairly volatile of late after a Chinese government crackdown on tech companies.

Impala Platinum led losses in the precious metals sector, falling 4.75% to R198.08. Anglo American Platinum relinquished 4.26% to R1,503.20, AngloGold Ashanti 4.17% to R235.83, Northam Platinum 3.66% to R183.50, Harmony Gold 3.62% to R48.50 and Sibanye-Stillwater 3.44% to R54.71.

Gold lost 0.27% to $1,822.74/oz, while platinum gained 0.24% to $1,025.99. Brent crude fell 1.06% to $72.10 a barrel.



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