Rand slips as Brexit chaos weighs on risk demand

The rand weakened early on Wednesday as the ongoing crisis in Britain over its exit from the European Union soured global risk appetite.

At 0630 GMT the rand was 0.24% weaker at 14.38 per dollar compared its overnight close in New York. The currency was volatile, rallying to a three-day high of 14.22 before retreating after British lawmakers again rejected a deal to quit the EU.

Uncertainty over Brexit as well as caution over the prospects of a trade agreement between the United States and China has seen risk demand ebb, with investors increasingly opting for safe-haven assets like the dollar, Japanese yen and gold.

Read: Britain in Brexit chaos: parliament crushes May’s EU deal again

Gold rose to a near two-week peak after reclaiming the key $1 300 level in the previous session, and was up 0.2% in early trade.

With the local data calendar light except for fourth quarter business confidence at 0900 GMT, the rand is set to continue tracking offshore events.

Bonds also weakened, with the yield on the benchmark paper due in 2026 up 4 basis points to 8.715%.

In equities, food producer Libstar reported a 16.1% fall in full-year normalised earnings, weighed down by the impairment in the niche beverages category.