South Africa’s rand fell, on Tuesday, hurt by the U.S. dollar’s five-year high, as investors bet the Omicron coronavirus variant would not derail the global economy or disrupt the Federal Reserve’s rate-hiking plans.
At 1602 GMT, the rand was trading at 15.9650 against the dollar, roughly 0.8% lower than its previous close, and it erased gains on Monday, the first trading day of 2022. read more
Markets are now focused on when the Federal Reserve will begin raising rates from their pandemic-era low, as investors see Omicron as potentially less disruptive to the global economy than previous variants.
A few South African economic data releases are due this week, including a purchasing managers’ survey (ZAPMIM=ECI) on Wednesday and reserves figures (ZAFXRS=ECI) on Friday. The rand is likely to follow global market trends this week.
Despite a tepid start to 2022 just one day earlier, the Johannesburg Stock Exchange resumed trading on Tuesday, driven by investors looking for gains.
In all, the all-share index (.JALSH) gained 1.8% at 75,052 points, while the blue-chip top 40 companies index (.JTOPI) gained 2.05% at 68,399 points, paralleling Wall Street’s gains.
Most of the gains were driven by financial stocks, particularly Naspers, which lagged the broader market last year. Despite an almost 25% gain in 2021, some analysts still consider South African stocks cheaper than peers.
