Rand retreats before current account data released

The rand retreated early on Thursday before the release of first-quarter current account data, giving back the previous session’s gains as global concern over a simmering trade war resumed.

At 0630 GMT the rand was 0.73% weaker at 13.74 per dollar, sliding back from Wednesday’s 13.56 as an emerging-market recovery petered out.

“We believe the risk-on phase of the last two years is over,” said strategists at Nedbank Newels Heyneke and Mehul Daya in a note.

The dollar resumed its rally, surging to near an 11-month high against a basket of currencies.

While the rand stopped short of the 14.00 mark in a prolonged slide in June, with some traders using 13.91 as a short target instead, the currency is expected to remain under pressure from external pressures and an uneven economic recovery locally.

The Reserve Bank publishes first-quarter current account data at 0800 GMT. The deficit is forecast to widen to 3.8%, a reminder of the country’s vulnerability to portfolio outflows that is likely to feed bearish sentiment.

The yield for the benchmark government bond due in 2026 was up 3.5 basis points in early trade to 9.06%.

Stocks were expected to open flat, with the JSE Top 40 Futures Index up only 0.1%. 

Source: moneyweb.co.za