Johannesburg - The rand’s resilience against a record-breaking dollar overshadowed the local financial markets once again on Wednesday.
The currency, which lost ground on Tuesday, bounced back strongly on Tuesday evening and traded on Wednesday morning more than 1% higher at R13.97 to a dollar, compared to R14.13 the previous day. That put a cap on the prices of the dual-listed shares, which represent a major part of the JSE’s market capitalisation. The losses on the JSE were, however, very modest.
Analysts are uncertain to call the rand’s next move as the dollar held on Wednesday near 14-year peaks as global yield spreads continued to shift in its favour. The Federal Reserve’s continued tightening means that that the yield premium between the US and emerging markets will continue to widen and it could lead to an outflow from these markets back the US.