BIDVEST: 19,288 +18 (+0.09%)
South Africa's rand retreats as Fed pendulum swings back to soft cuts
(Adds latest prices, analyst comments)
JOHANNESBURG, July 19 (Reuters) - South Africa's rand
weakened on Friday, giving back some of the big gains from the
previous session as expectations of an aggressive interest rate
cut by the Federal Reserve cooled, prompting investors to pocket
At 1520 GMT the rand was 0.63% weaker at 13.9275
per dollar from a session-best of 13.8150 in early trade after
momentum from a local rate cut on Thursday, seen as a boost to
faltering economic growth had lured investors looking to shed
long dollar positions.
The South African Reserve Bank (SARB) cut rates by 25 basis
points to 6.5% in a unanimous decision on Thursday, although it
struck a cautious tone suggesting future reductions to borrowing
costs were not a foregone conclusion despite benign
On Friday the New York Federal Reserve walked back dovish
comments from its president the prior day saying pre-emptive
measures were needed to avoid too-low inflation and interest
A New York Fed representative said New York Fed president
John Williams' comments were not about immediate policy
direction, dragging the greenback back from a two-week low. At
1520 the dollar measured against a basket of currencies was
The U.S. central bank decides on rates on July 31.
Bonds also weakened, with the yield on the benchmark 10-year
government issue adding 4.5 basis points to 8.02%.
On the bourse, stocks rose along with emerging market shares
and currencies after comments from a top Federal Reserve
official reinforced expectations of a U.S. interest rate cut
this month, stoking demand for riskier assets.
The benchmark Johannesburg Stock Exchange Top-40 Index was
up 0.72% at 52,107.18 points while the broader All-Share Index
closed 0.65% higher at 58,248 points.
Musa Makoni, GT247 trader, said trades were firmer earlier
in day, following the trend in Asia, with stocks in Europe and
the U.S. also on the up.
He also highlighted the performance of Pioneer Food Group
, which shot up 32.09% to 101.35 rand after it was
bought by PepsiCo for $1.7 billion dollars. Shares in
agribusiness investment company Zeder Investments,
which holds Pioneer as part of its portfolio, also rose 23.17%.
Other blue-chip winners of the day include mining company
Gold Fields which rose 2.97% and services, trading and
distribution company Bidvest which was up 2.83%.
(Reporting by Mfuneko Toyana and Emma Rumney; Editing by Toby
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