Rand back under R13.50/$, Asian markets higher ahead of JSE’s opening

The rand was comfortably back under R13.50 to the dollar on Monday morning, joining an emerging-market currency rally led by the Mexican peso.

The rand was trading at R13.45 to the dollar, R15.82 to the euro and R17.88 to the pound at 7am.

The rand, along with other emerging-market currencies, has tracked the Mexican peso higher since the election of Andres Manuel Lopez Obrador (known by his initials Amlo) on July 1.

“In his victory speech and after a meeting with and outgoing President Enrique Pena Nieto, Lopez Obrador and his team have pushed the business-friendly image hard. His pick for finance minister, Carlos Urzua, has been particularly outspoken, reassuring investors that the country’s 2019 budget will remain under control and the central bank’s independence will be respected,” Bloomberg reported.

The rand was the third best performing emerging-market currency, behind the Mexican peso and Argentina’s peso.

The pound was weaker against most currencies on Monday morning on the news that UK Brexit Secretary David Davis and Brexit Minister Steven Baker have resigned, placing the future of Prime Minister Theresa May in doubt.

Another factor helping the rand’s rally at the weekend was a report on Friday that US unemployment rose to 4% in June from 3.8% in May — missing economists’ expectations, and weakening the dollar against most currencies.

Asian markets were buoyant on Monday morning ahead of the JSE’s opening, with Naspers’s Chinese associate Tencent up 2.38% to HK$395.80 in Hong Kong.

BHP was up 2.05% to A$33.83 and South32 was up 0.28% to A$3.63 in Sydney.

It is a quiet week on the JSE results front, and no local economics data is scheduled for release on Monday.