Rand slightly soft ahead of a data-heavy day
The rand was softer against major currencies on the back of a data-heavy day on the global and domestic fronts.
The dollar gained support after the US Federal Reserve took a dovish tone regarding adjusting interest rates during Wednesday’s Federal open market committee meeting.
The global markets continue to be cautious as more developments unfold in the US-China trade war. Reuters reported that after temporarily lifting the ban on Huawei, the Trump administration might also impose Huawei-like sanctions on Chinese video surveillance firm Hikvision over China’s treatment of the Uighur Muslim community.
On the local front, the Reserve Bank is expected to keep the interest rate unchanged at 6.75%.
At 10am, the rand weakened 0.4% to R14.4336/$ and 0.26% to R16.071/€ as the EU parliamentary elections take place today amid Brexit jitters. The rand against the pound was flat at R18.1984. The euro was down 0.14% to $1,1135.
“It seems that the rand is very comfortable at current levels and it will take a rabbit out of the hat from the MPC [monetary policy committee] to move local markets. It seems that the market is waiting for political developments rather than local economies. Expect the rand to stay in current ranges and drift sideways after shrugging off the Fed comments,” said TreasuryONE senior dealer Andre Botha.
Gold was unchanged at $1,274.40/oz and platinum down 0.24% to $802.18. Brent crude fell 0.47% to $70.48 a barrel.
The benchmark R186 government bond weakened, with its yield rising three basis points to 8.42%. Bond yields move inversely to bond prices.
Corporate treasury manager at Peregrine Solutions Bianca Botes said the manufacturing purchasing managers’ index and US jobless claims figures may lead to a volatile afternoon.
The markets continue to keep an eye on domestic political developments as President Cyril Ramaphosa is expected to announce his cabinet over the weekend.
Source: businesslive.co.za
