Rand mixed ahead of cabinet reshuffle and interest-rate decision
The rand was mixed against global currencies on Thursday afternoon as the market braced for possible volatility stemming from a simultaneous monetary policy announcement, and cabinet reshuffle. As the local currency braced for these domestic risk events, the pound found some support from Brexit developments.
At 3pm, President Cyril Ramaphosa is scheduled to announce changes to his cabinet. This could entail adjustments to the economic clusters as the government moves to tackle structural constraints to SA’s economic growth.
At the same time, analysts are split on whether or not the Reserve Bank will raise interest rates.
The rand was a little firmer against the dollar, but flat against the pound, amid speculation over a Brexit deal.
At 2pm, the rand was up 0.78% against the dollar at R13.8249 and 0.52% against the euro at R15.7828, while it was flat against the pound at R17.8171. The euro was 0.27% firmer at $1.1416.
UK Prime Minister Theresa May is gearing up for a meeting with EU officials at the weekend. A draft Brexit deal has already been agreed to by the EU and UK, but it has emerged that some hurdles remain, including objections by Spain over Gibraltar and issues of fishing rights. Even if these are sorted out, May will still need to face a contentious Brexit vote in December.
Said FXTM research analyst Lukman Otunuga, “With pessimism in the air over the UK parliament approving any deal Theresa May brings forward, fears of a no-deal Brexit scenario are poised to intensify.”
Source: businesslive.co.za
