Rand firms slightly as investors await move by Moody’s

The rand was firmer on Friday morning but still trading above R15/$ as markets await a ratings review by Moody’s Investors Service.

Some analysts say the odds are high that Moody’s will change SA’s outlook from stable to negative, which is likely to result in further losses in the rand.

“The rand is now completely at the mercy of Moody’s. Option one [negative outlook] has been priced in now although expect a minor bit of fireworks on Sunday/Monday in any case,” said Standard Bank currency dealer Warrick Butler said.

“Option two [negative watch] is my main fear, and this could see the rand head above the recent highs en route to the stratosphere,” Butler said.

The local currency looks set for its worst weekly drop since August after a sombre medium-term budget policy statement on Wednesday hurt investor sentiment.

At 10.10am, the rand strengthened 0.28% to R15.0625/$ after closing at R15.1047 on Thursday. It had firmed 0.15% to R16.8211/€ while it was flat at R19.537/£. The euro was had strengthened 0.14% to $1.1167. 

The generic 10 year government bond was little changed at 9.189%. 

Gold was flat at $1,513.12/oz while platinum was up 0.11% to $933. Brent crude 1.31% to $59.99 a barrel.

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