Rand remains on back foot amid more signs of depressed confidence

The rand was weaker against major global currencies on Wednesday afternoon, but its losses against the dollar were relatively contained, as the market continued to digest data suggesting SA’s growth forecast for 2018 required downward revision.

The rand slid against most currencies on Tuesday, as the markets absorbed disappointing GDP numbers for the first quarter, with lower-than-expected confidence underscored by additional data on Wednesday.

Earlier, the South African Chamber of Commerce and Industry’s (Sacci’s) monthly business confidence index (BCI) fell to 94 points in May, from 96 points in April. The decreased figure, coupled with the dismal GDP figures released on Wednesday spoke to the structural challenges facing the economy, said Peregrine Treasury Solutions’ Bianca Botes.

The euro, meanwhile, firmed against the dollar, following a speech by newly inaugurated Italian Prime Minister Giuseppe Conte in which he said his government would not consider ditching the euro.

Commentary from European Central Bank (ECB) policy makers that unwinding monetary stimulus would be discussed by the bank next week also bolstered the common currency, reported Dow Jones Newswires.

At 3pm, the rand was at R12.8034 to the dollar from R12.7638, R15.0644 to the euro from R14.9553, and R17.1774to the pound from R17.1037.

Local bonds were mixed, with the yield on the benchmark bond offering 8.67%, from 8.64% on Tuesday. The longer-dated R207 was at 7.415% from 7.43%.

At the same time The euro was at $1.1766 from $1.1718.