Rand somewhat better ahead of key central bank policy meetings

But global events recently have taken the shine off the so-called Ramaphoria, as exemplified by bond and equity outflows.

Foreigners were net sellers of local bonds to tune of R15.8bn over the past week, according to the JSE’s weekly data, partly accounting for the recent sharp sell-off in the rand and local bonds.

The rand has swung from R11.50/$ in late February to R13.03/$ now, in a sharp move that has raised inflation concerns.

“The rand has reached our year-end target [R13.10/$] faster than expected. The rapid weakness in the rand potentially looks like an overshoot hence we are cognisant not to extrapolate current weakness too far into the future,” Nedbank Corporate and Investment Banking analysts Mehul Daya and Walter de Wet wrote in a note.

Markets will also keep a close watch on the European Central Bank, which could announce plans to exit its unconventional monetary policy stimulus, known as quantitative easing.

That signal by the ECB sent the euro sharply higher recently, though receding political tension in Italy added to positive momentum.

Markets have been relatively resilient to the global trade war narrative, as shown in the tension between members of the Group of Seven and the US at the weekend.

Local bonds also fared a lot better in early trade in line with the rand, with the yield on the benchmark R186 bond last bid at 8.91% from 8.95%.

At 10.08am, the rand was at R13.0394 to the dollar from R13.1066, R15.4027 to the euro from R15.4228 and R17.5070 to the pound from R17.5440. The euro was at $1.1812 from $1.1775.