Rand extends losses as stocks are set to open flat

South Africa’s rand extended losses against the U.S. dollar early on Tuesday, hurt by lingering domestic political tensions and a stronger greenback.

* At 0645 GMT, the rand traded at 13.0500 per dollar, 0.6 percent weaker from its New York close on Monday.

* The currency started the week on the back foot after President Jacob Zuma survived another call from inside the ruling party for him to step down.

* Zuma is facing mounting pressure from African National Congress members, opposition parties and civil society since he sacked respected finance minister Pravin Gordhan in March, triggering credit rating downgrades.

* “Optimism built up over the weekend has faded and the rand still has 20-30 cents to go if all of last week’s outperformance is to be reversed,” Rand Merchant Bank currency strategist John Cairns wrote in a note.

* “Trade has been less volatile than expected, but the U.S. and UK public holidays probably held back bigger moves and so there could be some weekend-related follow-through volatility today,” he added.

* Stocks were set to open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index barely unchanged.

* In fixed income, the yield for the benchmark government bond due in 2026 rose 4.5 basis points to 8.64 percent.