Rand is mixed as EU leaders reach accord on migrants

The rand was flat against the dollar but weaker against the pound and euro on Friday afternoon as risk appetite improved globally, while local news came only in the form of bitter pills.

The euro staged a relief rally after EU leaders agreed on Thursday night on a plan to deal with the migrant crisis, an issue which posed a risk to the stability of the eurozone.

Although the details of the deal were still vague, “this seems to be pan-European effort deal with the problem in a standardised way, instead of the current ad-hoc approach to the issue”, said BK Asset Management MD Boris Schlossberg.

Sterling was also buoyant, benefiting from the combination of improved risk appetite and a small upward revision earlier to the UK’s first quarter GDP, said Oanda analyst Craig Erlam.

Local news and data was less positive, with “load rotation” resulting in power outages in many areas of SA’s economic hub, Johannesburg.

Unions at Eskom have rejected a revised wage offer from the power monopoly, which further threatens both the electricity supply and the fiscus.

SA’s trade surplus was less than expected at R3.52bn in May, below consensus forecasts of between R5.8bn and R5.9bn.

Private-sector credit extension also disappointed, coming in at 4.6% year on year in May from 5.1% the previous month.

At 3pm, the rand was at R13.7713 to the dollar from R13.7688 on Thursday. It was at R16.0390 to the euro from R15.9303, and R18.0992 to the pound from R18.0085. The euro was at $1.1647 from $1.1570.