Rand remains steady in choppy trade as market eyes global developments

The rand was range-bound on Friday afternoon as international developments guided trade in the local currency, with the dollar continuing to gain on the pound.

The pound has been on the back foot since UK Prime Minister Theresa May unveiled her “soft” Brexit plan. The market is pricing in uncertainty amid the tough negotiations with the EU that lie ahead.

After publicly criticising May’s Brexit strategy, US President Donald Trump said on Friday that the US-UK relationship was “very, very strong”.

XM.com investment analyst Andreas Georgiou said May’s plan sought frictionless access to the single market for goods, but not for services.

“This plan is unlikely to be accepted by the EU in its current form, which implied that further negotiations and, potentially, concessions may lie ahead,” he said.

Trade tension was still in focus on Friday, but investors diverted their attention to the US’s second-quarter earnings season, which is due to begin in earnest when the Dow opens.

Major banks JPMorgan Chase, Citigroup and Wells Fargo were scheduled to report results, which could help set the tone for the reporting season, Dow Jones Newswires reported.

At 3pm the rand was at R13.3013 to the dollar from R13.3038, at R15.4915 to the euro from R15.5251 and at R17.5004 to the pound from R17.5699.

The euro was at $1.1646 from $1.1669 and the pound at $1.3157 from $1.3205.

Local bonds showed little movement in afternoon trade. The benchmark R186 was bid unchanged at 8.73%.

The US 10-year treasury was at 2.8368% from 2.8442%.