The rand extended gains on Wednesday afternoon, appearing to ignore trade-war jitters as the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) improved to its highest level in three months.
The BCI rose to 92.4 points in September from a 34 year-low of 89.1 in August. The latest figure was above Bloomberg’s median forecast of 89.
“The Sacci confidence indicator definitely came as a positive for the rand after two days of consecutive declines,” Monex Europe analyst Simon Harvey said. “Although it must be noted that the increase in business confidence comes from a multi-decade low in August, but the reading does point towards a period of stability in the SA economy,” Harvey said.
“The path of reforms, the major Eskom announcement and the medium-term budget policy statement at the end of the month will be more pivotal for expectations of the economy due to their longer-term repercussions.”
Markets will be watching meeting minutes from the US Federal Reserve later in the day amid expectations of it cutting its interest rate for the third time in 2019. “A crucial supporting factor [for the rand] until the medium-term budget policy statement will be whether global, developed-market central banks can maintain a sense of calm with policy easing,” Mercato Financial Services analyst Nico Du Plessis said.
At 3.45pm, the rand had firmed 0.67% to R15.1771/$, 0.46% to R16.6656/€ and 0.7% to R18.5451/£. The euro had strengthened 0.23% to $1.0982.
Gold was flat at $1,506.6/oz while platinum was down 0.82% to $883.9. Brent crude added 1.55% to $59.02 a barrel.