Rand could cheer majority for ANC, says analyst
The rand was slightly weaker on Tuesday morning, with range-bound trade expected, ahead of possible volatility in coming days.
The next major local event is the May 8 national polls, with trade in the rand expected to be cautious as investors wait for the results.
Although the ANC is widely expected to win, the margin of its victory will be closely watched, as this could determine the extent to which President Cyril Ramaphosa will be able to drive his reform agenda. The anti-corruption and pro-growth aspects of the agenda is seen as market-positive.
Should the ANC win a two-thirds majority in the 2019 polls, the rand could experience another bout of Ramaphoria, and could initially push to R13.50/$, said Peregrine Treasury Solutions corporate treasury manager Bianca Botes.
“Such strength will, however, not be sustainable as the same problems will continue to exist, with the biggest risk being Eskom,” said Botes. “Many feel that the governing party simply does not have the ability to turn the ship around.”
The week is a busy one, with a range of local and international economic news expected, although Wednesday being a public holiday in SA is expected to subdue activity a little.
At 9.30am, the rand had weakened 0.31% to R14.3697/$, 0.31% down at R16.0734/€, and had softened 0.42% to R18.6048/£. The euro was flat at $1.1186.
Sentiment was dented a little by poor Chinese data. A gauge of China’s factory activity weakened sharply in April, showing that economic stabilisation had not found a firm footing yet, reported Dow Jones Newswires.
Amid a spate of risk-events this week, the US Federal Reserve is expected to announce its latest stance on monetary policy on Wednesday, while the Bank of England will do the same on Thursday.
Friday sees the release of US non-farm payrolls numbers for April.
Source: businesslive.co.za