Rand weakens in cautious afternoon trade

The rand remained on the defensive on Friday afternoon, with global markets expected to be somewhat subdued due to a long weekend in the US.

Investors are also expected to be cautious ahead of S&P Global Ratings’ latest assessments of SA’s creditworthiness, with the announcement expected at about midnight local time.

International data failed to give the market much direction, and therefore any moves in foreign exchange rates were likely to be due to equity flows, said BK Asset Management MD Boris Schlossberg.

The dollar found some support from signs that North Korea and the US would continue to engage over the former’s nuclear programme.

Local bonds held up well despite the weaker rand, possibly bolstered by a 2.5% fall in the price of Brent crude, which has put reduced fears over rising inflation. Higher inflation tends to weaken bonds.

Brent crude fell after reports that both Russia and oil-cartel Opec would consider loosening production cuts in their June meeting.

At 3pm, the rand was at R12.5084 to the dollar from R12.4218, R14.6099 to the euro from R14.5585 and R16.6986 to the pound from R16.6212.

The euro was at $1.1680, from $1.1721.

Source: businesslive.co.za