JOHANNESBURG: South Africa's rand ended a five-day winning streak to the dollar on Monday as the dollar firmed one the likelihood of a December rate hike by the US Federal Reserve and its negative impact on emerging markets.
Resource stocks pulled the bourse lower as base metals fell to multi-year lows on worries that the surge higher in the dollar will deter producers from making supply cuts in a market battling poor demand, especially in top user China.
By 1621 GMT, the rand fell 1 percent to 14.0940 per dollar, which firmed to just shy of a seven-week high The rand had raced to a two-week high in the wake after South Africa lifted rates by 25 basis points last Thursday.
"Markets are going to cruise around this range, especially going into US nonfarm payrolls on next Friday (Dec. 4), plus there's also the Fitch and S&P reports to come," a trader said.
Fitch has South Africa on BBB with a negative outlook, and is expected to downgrade it to one notch above sub investment grade when its publishes its latest review on Dec. 4, bringing it in-line with ratings by Moody's and S&P.
In June the rating firm cut its 2015 and 2016 forecasts for Africa's most advanced economy citing electricity shortages amongst other constraints on growth.
Third quarter growth data due on Tuesday is expected to show Africa's most industrialised economy avoided a second successive contraction, but is likely to confirm subdued economic activity, further weighing on currency.
Yields rose on government bonds, with the benchmark issue due in 2026 adding 3.5 basis points to 8.45 percent.
On the bourse, the benchmark Top-40 index was down 0.09 percent to 46,920 points while the All-share index declined 0.09 percent to 52,195 points.
Media giant Naspers hit a new high, as the media and e-commerce giant rallied more than 3 percent to close at an all-time high of 2,233.00 rand, despite releasing a trading update late on Friday flagging a drop in earnings.
"It's got some momentum behind it and the market might be anticipating some good news when it announces results on Friday," Cratos Capital equities trader Greg Davies said.
Selling was mostly in the resource stocks with both Anglo American and BHP Billiton declining on negative sentiment as the copper price hit a new record low, said Davies.
Anglo American was the worst performer among the blue chips, shedding 4.2 percent to 93.03 rand, while BHP Billiton dropped 3.4 percent to 184.38 rand.
Trade was lively with 252 million shares changing hands, compared to last year's daily average of 183 million shares.
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