South Africa’s rand on back foot; Zuma deadlock continues

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South African Rand Currency

South Africa’s rand opened weaker in local trade on Wednesday following volatile overnight trade caused by uncertainty over President Jacob Zuma’s future.

At 0645 GMT the rand was 0.4 percent softer at 11.9600 per dollar, having rallied as far as 11.8900 as trading in New York approached close before Asia trade knocked it back toward the 12.00 mark.

News that the ruling African National Congress (ANC) had postponed Zuma’s state of the nation address scheduled for Thursday spurred bets that his resignation was imminent.

However, the cancellation of a party meeting where his future would be discussed dimmed hopes of an early exit.

Short sellers took profits at the 11.95 level on technical indications the rand will regain momentum and push toward 11.85 level and break even lower when Zuma eventually steps down.

On Wednesday, the ANC’s effort to unseat Zuma moved toward the end game with the speaker of parliament saying party leader Cyril Ramaphosa would outline the scandal-plagued president’s fate shortly.

Bonds were firmer with the yield on the benchmark paper due in 2026 down 6.5 basis points to 8.405 percent.

Stocks opened lower at 0700 GMT, with the JSE securities exchange’s All Share index down 0.15 percent.

Amaka E. Nliam