South Africa’s rand slips as investors book profits

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JOHANNESBURG (Reuters) – South Africa’s rand weakened on Monday, succumbing to a resurgent dollar and some profit-taking after seven weeks of gains sparked by leadership changes in the ruling party and a rally in global commodity prices.
At 0645 GMT the rand was 0.4 percent weaker at 12.3525 per dollar compared to a close of 12.3050 in New York on Friday.

Late on Friday U.S. nonfarm payrolls increased slightly less than expected, but traders bet the Federal Reserve remained on track to raise interest rates in 2018, igniting some dollar buying after a soft start to the year.

The rand has seen volatile trade in the first week of the year after a stellar 2017 that saw it rack up gains of 11 percent against the greenback.

Persistent rumours that President Jacob Zuma could be forced to step down before his term ends in 2019 supported some short term gains in the rand, but the rally stalled in the face of technical barriers and economic fundamentals.

Analysts saw strong resistance at around 12.24, while momentum indicators showed the currency in overbought territory and a likely target for continued selling.

Bonds traded firmer with yield on the benchmark paper due in 2026 down 1.5 basis points at 8.55 percent.

The blue-chip JSE Top-40 index opened 0.46 percent firmer at 52,083 points.

Reporting by Mfuneko Toyana; Editing By Joe Brock

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Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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