Rand firmer on trade surplus, weaker dollar

THE RAND firmed against the dollar yesterday, supported by a weaker greenback and data showing the country’s trade surplus widened last year.

At 5pm, the rand bid at R11.8495 to the dollar, 11.34c stronger than at the same time on Tuesday, about 0.85 percent firmer than its close on Tuesday.

South Africa’s trade surplus in December widened to R15.72 billion from a R13.05bn surplus in November, the revenue agency said.

On a cumulative basis the trade balance between January and December was at a R80.55bn surplus compared to a R1.05bn surplus over the same period in 2016.

“One of the catalysts is the slight dollar weakness that has come into the market that has helped South Africa and the rest of emerging markets gain a little bit of ground,” said TreasuryOne chief currency dealer, Wichard Cilliers. He added: “The trade surplus has also helped the rand slightly.”

Market attention was also pinned on President Jacob Zuma’s future as head of state.

South African news website News24 reported late on Tuesday that top officials from the ANC would meet Zuma to discuss “options” to avoid him being impeached or voted out by parliament.

The ANC has been discussing whether to tell Zuma, whose presidency has been tainted by corruption allegations, to resign.

Any sign that Zuma could go before his second term ends next year has tended to boost domestic assets, including the rand.

Government bonds also firmed, with the yield for the benchmark instrument falling 9 basis points to 8.47 percent.

In equity markets, the main stock indices ended little changed but Vodacom was in demand after the mobile phone operator reported higher quarterly sales.

Vodacom, the unit of Britain’s Vodafone, advanced 5.45 percent to R163.50 after posting a 6.7 percent increase in third-quarter sales thanks to increasing customer base. Among other top gainers, Barclays Africa Group rose 4.13 percent to R180.10.

The blue chip JSE Top40 index was off 0.16 percent at 52 614.65 points and the broader all share index inched down 0.07 percent to close at 59 506.12 points