Rand edges high

Mixed denomination rand currency banknotes are arranged for a photograph at a First National Bank (FNB) branch in Johannesburg, South Africa, on Friday, March 15, 2013. A recovery in mining and manufacturing is giving South Africa's rand and bonds a breather amid concern that growth is slowing while inflation accelerates. Photographer: Nadine Hutton/Bloomberg via Getty Images

The Euro-South African Rand (EUR/ZAR) exchange edged higher today, with the pairing currently trading around R16,087 as rising concerns over the South African Government’s tax and spending plans for 2020-2021 are rising, with further guidance for the nation’s economy essential to the nation’s domestic fiscal policy going forward.

Anezka Christovova, an analyst at JP Morgan, London, commented: “In the near term, (the South African Rand) is likely to be vulnerable to a disappointing budget. We have previously found that a reaction to a downgrade decision is more pronounced if it comes at a time when the exchange rate is not pricing the risk particularly well, trading fair or overvalued heading into such an outcome.”

The South African Rand (ZAR) is also being held back by rising global economic uncertainty, with China, a close trading partner to South Africa, coming under increasing pressure from the coronavirus outbreak. — TorFX News.