Rand weakens as oil pushes towards $85
The rand was weaker against major global currencies on Tuesday morning, under some pressure from a firmer dollar and following a push by oil to $85 a barrel overnight.
There were no clear catalysts for the push, analysts said, beyond a report suggesting tightening US inventories.
“Ultimately the markets remain singularly focused on the prospect of supply disruptions from Iran, which is the primary driver of oil prices,” said Oanda analyst Stephen Innes. “Of course, the US-Mexico-Canada trade agreement will have a longer-term positive impact on oil prices in a broader macro context.”
Rising oil prices come as SA grapples with the political implications of increasing fuel costs, with multiple calls for the government to scrap the fuel levy, which constitutes almost a third of the price at the pump.
Local news is taking a backseat, while the rand is also under some strain from a stronger dollar. The greenback is on the front foot due to political problems in Europe, where the Italian government continues to push for a higher budget deficit. This could put Italy’s anti-establishment government on a collision course with Brussels.
At 9.40am the rand was at R14.3294 to the dollar from R14.2277, at R16.5296 to the euro from R16.4729 and at R18.6319 to the pound from R18.5511. The euro was at $1.1536 from $1.1578.
Brent crude was last seen 0.15% lower at $84.882, having earlier reached an intraday high of $85.282.
Source: businesslive.co.za
