Johannesburg - The rand firmed on Wednesday as the US dollar fell against a basket of currencies, with investors cautious about increasing bets on the greenback before getting fresh clues on the US economy and the timing of interest rate rises.
Stocks were hit by heavily weighted rand hedges coming under pressure from a strong currency.
At 5pm, the rand traded at R13.6250 to the dollar, 1.46 percent firmer from its New York close on Tuesday.
The dollar index, which measures the greenback against a basket of six major rivals, fell 0.42 percent to 102.78, having hit a peak of 103.82 on Tuesday.
“The closer we get to Friday and the US employment data we should see the dollar momentum start to pick up again but in the meantime it’s all a bit of a drag,” Standard Bank head of foreign exchange spot trading, Warrick Butler, said in a note.
On the bond market, government bonds also firmed and the yield for the benchmark instrument due in 2026 fell.
On the bourse, the benchmark JSE Top40 index dropped 0.67 percent to 43963.22 points, while the all share index dipped 0.51 percent to 50760.24 points.
Rand-hedged stocks, or those that reap the bulk of their revenue outside the country, led the decline as the rand gained ahead of US employment data.
“The rand is playing havoc with your dual listed stocks,” said BP Bernstein trader, Vasili Tirasis.
Richemont fell 1.96 percent to R88.25, British American Tobacco dropped 1.19 percent to R770.50 and BHP Billiton declined 1.92 percent to close at R219.50.
Trading was slow on the bourse on Wednesday, with a total of around 145 million shares changing hands compared with last year’s daily average of 296 million.