Rand weakens in early trade

The rand inched down early on Friday, following its near-2% gain recently, while President Cyril Ramaphosa’s state of the nation address (SONA) last night failed to detail any new reforms.

At 0630 GMT, the rand was 0.14% weaker at R14.64 per dollar, little moved from its overnight close of R14.62.

The rand strengthened nearly 2% in the past four sessions and is set to post a more than one month best of R14.60, mostly taking its cues from offshore events such as the dollar’s recent slide.

There has been a divergence in views among traders this year over just how US President Joe Biden’s planned $1.9 trillion fiscal stimulus package will affect the dollar.

So far, expectations of continued monetary policy accommodation have left the greenback reeling and risk currencies in favour.

“While the broader bias remains in favour of risk assets, there appears to be a stalemate in the market as it assesses whether or not to book some profits after the recent risk rally,” said economists at ETM Analytics.

“Additionally, with SONA now in the rear-view mirror, investor focus will shift to the annual budget speech later this month, which could trigger some added volatility in the coming days.”

In his address on Thursday evening President Ramaphosa said the country, hit hard by a second wave of Covid-19, would undertake a massive vaccination program.

Ramaphosa said South Africa had secured 9 million doses of the J&J vaccine, while another 20 million doses of the vaccine from Pfizer and BioNTech were also on their way.