admin
The rand perked up a little on Wednesday morning, taking direction from overseas markets where the dollar was shaky following tame US inflation figures, which put the markets at ease about the pace of interest-rate increases.
The dollar also reeled from US politics, after President Donald Trump fired his secretary of state‚ Rex Tillerson. This came less than a week after Trump’s economic adviser, Gary Cohn, quit amid reports of disagreement over US import tariffs.
however, in each instance the rand has showed a knee-jerk reaction, rather than a step change.
ETM Analytics Halen ETM Analytics Halen Bothma said the rand was in a consolidation phase, after the so-called Ramaphosa rally had died down.
“Fundamentals have come to the fore, now that [local] politics is out of the way. Markets will want to see the results of Moody’s ratings review and how the Reserve Bank approaches its monetary policy before placing big bets on the table.”
Moody’s is the only major ratings agency to still rate SA’s rand and foreign-currency denominated debt at investment grade. Fitch and S&P Global cut the country’s debt to junk in 2017.
Finance Minister Nhlanhla Nene again expressed confidence on Tuesday that SA would stave off a ratings downgrade from Moody’s, which will deliver its review next week.
Nene spoke to Business Day from London, where he was leading a South African delegation, which met all three rating agencies as well as potential investors.
At 9.44am, the rand was at R11.7555 to the dollar from R11.8099, R14.5629 to the euro from R14.6345 and at R16.4070 to the pound from R16.4950
The euro was at $1.2387 from $1.2393. – BusinessLive
Online Reporter