LONDON Nov 29 The South African rand fell
almost two percent on Tuesday, leading emerging currency losses
as the ruling party's efforts to remove President Jacob Zuma
failed and the dollar firmed after a two-day slide.
Most other emerging assets also slipped, with the exception
of the yuan, which rose to one-week highs thanks to
dollar-buying by state-run banks and reports of fresh capital
Emerging stocks slipped 0.3 percent after hitting two-week
highs, as Asian markets reacted to Monday's weak Wall
Street close and doubts that the upcoming OPEC oil producers'
meeting will be able to implement an output cut.
Markets will likely focus on South Africa, which dodged
relegation to a junk credit rating last week but faces another
test from S&P this Friday.
The rand reversed some of Monday's 3 percent gains against
the dollar after a newspaper reported that scandal-tinged
President Jacob Zuma had survived a ruling party vote to oust
him. Bond yields rose five basis points off two-week
Markets were awaiting a 1200 GMT press briefing by the
ruling ANC party.
Credit Agricole strategist Guillaume Tresca predicted more
rand weakness after the past week's 7 percent gain, and expects
S&P to cut South Africa's credit rating. He noted the agency had
downgraded state-run utility Eskom last week.
"Usually they are more negative than the other ratings
agencies regarding South Africa ... When you read all the
statements from S&P regarding South Africa they always mention
the indebtedness of the public companies," Tresca said.
He said politics too would remain messy. "The feud between
Zuma and (finance minister Pravin) Gordhan is not over. The
market is maybe too complacent and too optimistic."
Other emerging currencies also eased against the dollar,
with the rouble down 0.4 percent and the Malaysian ringgit
hovering near 14-month lows on the back of a 1 percent decline
in oil prices .
However, the Chinese yuan rose to one-week highs as
state-run banks stepped in to buy the currency for the second
straight day and sources said the country's forex regulator
would step up measures to stem capital outflows through tighter
vetting of outbound investment deals.
Offshore-traded yuan also slipped after hitting record lows
Mainland China blue-chip stocks rose to 11-month highs,
taking heart from Monday's data hinting at stronger
manufacturing and corporate earnings.
However, capital outflows via both legal and illegal
channels are increasing pressure on the yuan, which has
depreciated nearly 6 percent against the dollar this year.
Yuan weakness raises the spectre of more capital flight and
Societe Generale analysts noted that the domestic money stock
was still growing faster than nominal GDP and valuations for
local assets such as property and stocks looked stretched.
"It is going to be an uphill battle for the PBoC to retain
control over the speed of currency adjustments," SocGen said,
predicting the yuan would trade at 7.30 per dollar by end-2017,
revising the previous 7.20 forecast.
Dollar/yuan non-deliverable forwards price a 7.10 exchange
rate in a year's time.
The Turkish lira slipped 0.2 percent, staying off recent
record lows. Data showed October tourist arrivals
dropping 25.8 percent year-on-year but this was the smallest
percentage fall in seven months.
For GRAPHIC on emerging market FX performance 2016, see tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2016, see tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 860.70 -2.47 -0.29 +8.38
Czech Rep 883.03 -2.10 -0.24 -7.66
Poland 1781.24 +4.94 +0.28 -4.19
Hungary 30056.58 +54.08 +0.18 +25.65
Romania 6797.10 +7.60 +0.11 -2.96
Greece 605.75 +1.69 +0.28 -4.05
Russia 1013.83 -4.35 -0.43 +33.92
South Africa 43826.91 +210.00 +0.48 -4.30
Turkey 74885.53 -104.70 -0.14 +4.40
China 3283.36 +6.36 +0.19 -7.23
India 26472.33 +122.16 +0.46 +1.36
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 27.03 27.04 +0.04 -0.12
Poland 4.43 4.42 -0.26 -3.85
Hungary 311.43 310.75 -0.22 +1.03
Romania 4.51 4.51 -0.07 +0.11
Serbia 123.17 123.06 -0.09 -1.38
Russia 64.98 64.71 -0.42 +12.26
Kazakhstan 340.45 340.47 +0.01 +0.01
Ukraine 25.58 25.67 +0.35 -6.36
South Africa 13.97 13.72 -1.75 +10.69
Kenya 101.80 101.80 +0.00 +0.39
Israel 3.84 3.84 +0.11 +1.32
Turkey 3.42 3.41 -0.28 -14.80
China 6.90 6.91 +0.11 -5.88
India 68.67 68.57 -0.15 -3.60
Brazil 3.40 3.38 -0.47 +16.44
Mexico 20.67 20.63 -0.21 -16.95
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 385 -1 .04 7 29.64 1
All data taken from Reuters at 09:19 GMT.
Currency percent change calculated from the daily U.S.
close at 2130 GMT.
(Additional reporting by Claire Milhench; editing by Mark