Rand at one-month high on Moody’s comments
The rand was weaker against the dollar on Wednesday morning but still at its best levels in more than a month after Moody’s Investors Service eased downgrade fears.
Moody’s said on Tuesday that SA is safe from a credit ratings downgrade for the next 12-18 months. Moody’s is the only global credit ratings agency that has not downgraded SA to below investment grade.
“The news that a downgrade from Moody’s Investors Service was not a dead certainty despite decreasing their growth rate for SA accounted for some of the rand gains overnight as well as some good news on the trade front,” said TreasuryOne senior currency dealer Andre Botha.
On Wednesday, China exempted 16 types of US products from additional tariffs, which will be effective as of September 17.
The rand reached R14.60/$ during Wednesday’s morning session, its best level in more than a month.
The European Central Bank (ECB) is expected to announce its decision on monetary policy on Thursday amid speculation that the bank may put in place stimulus measures.
“Investors are expecting the full [ECB president] Mario Draghi bazooka at his penultimate meeting, something to complete the highlight reel from a remarkable eight years,” Oanda senior market analyst Craig Erlam said.
At 9.50am, the rand had weakened 0.38% to R14.6988/$, 0.34% to R16.225/€ and 0.44% to R18.1752/£. The euro was flat at $1.1038.
The benchmark R186 government bond was weaker, with the yield rising 5.5 basis points to 8.18%. Bond prices move inversely to bond yields
Gold was up 0.33% to $1,490.26/oz and platinum edged up 0.58% to $937.55. Brent crude added 0.16% to $62.90 a barrel.
The Bureau for Economic Research is expected to release the business confidence index for the third quarter on Wednesday. The expectation is for business confidence to remain unchanged at 28 points, according to a Bloomberg consensus.
Source: businesslive.co.za