The rand firmed on Friday as domestic political concerns eased, with the focus of investors shifting to inflation data and the US central bank meeting next week.
Stocks weakened along with global equity markets as Chinese data stoked investor anxieties over a global growth slowdown.
At 1550 GMT, the rand traded at R14.79 per dollar, 0.5% firmer than its close on Thursday.
Domestic political uncertainty has fed investor jitters in recent days, after the main opposition party called for South Africa’s graft watchdog to release a report into allegations President Cyril Ramaphosa misled parliament over a donation to his 2017 campaign to lead the ruling African National Congress party. A spokeswoman for the presidency declined to comment.
Senior ANC officials meanwhile contradicted each other over whether the party had decided to expand the South African Reserve Bank (SARB) mandate in the wake of data showing the worst economic contraction in a decade.
Bianca Botes, a Treasury partner at Peregrine Treasury Solutions, said fallout from the SARB mandate debacle seems to have settled, for now.
“With severe fluctuations in the local unit, short-term strength should be used as a buying opportunity as biases still lean towards a weaker rand by the end of 2019,” Botes said.
South Africa’s May consumer price inflation data is due to be released on Wednesday. The numbers will assist in setting the tone for the next interest rate decision in July.
Investors are also looking towards the US Federal Open Market Committee (FOMC) meeting next week to see if the US central bank’s monetary policy stance matches market expectations for a near-term rate cut.
In fixed income, the yield on the benchmark government bond due in 2026 dipped a basis point to 8.38%.
On the bourse, the benchmark JSE Top 40 Index fell 0.81% to 52,166 points while the broader All-Share Index weakened 0.86%, closing at 58,193 points.
Energy company Sasol and paper and packaging company Mondi PLC were the biggest losers on the blue-chip index, with Sasol down 2.06% to R357, while Mondi PLC dipped 1.99% to R321.34.
A rise in oil prices on Friday was not enough to lift Sasol as prices remained on track for a weekly loss on fears that trade disputes will dent global oil demand.
Retailer Steinhoff weakened 4.55% to R1.47 ahead of the publication of its delayed 2018 results on Tuesday.
On the upside, a rush to safe-haven assets like gold boosted local bullion miners like AngloGold Ashanti, up 3.68% and Goldfields up 1.75%.
South African markets will be closed on Monday for a public holiday.