Rand steadies, Omicron uncertainty lingers

The rand steadied in early trade on Friday, struggling for momentum as some uncertainty over the Omicron coronavirus variant lingered.

At 08:25, the rand traded at R15.92 against the dollar, not far off its previous close of R15.94.

The continued spread of the Omicron variant globally has in recent days buoyed havens like the dollar and pressured riskier currencies.

Omicron, first discovered in southern Africa, has quickly established itself as the dominant strain in South Africa and is likely to impact economic growth.

“The economic outlook is becoming less rosy as the risk of more stringent restrictions has increased, and their impact could weigh on economic activity in the final quarter of the year,” analysts at Oxford Economics Africa said in a note.

“Moreover, depending on the severity of a potential fourth wave, the economy could start 2022 on a softer footing than previously thought.”

Investors focus was also on key US jobs data that could clear the path to earlier Federal Reserve interest rate hikes, even as Omicron uncertainties cloud the outlook.