Sixth day of losses for rand
The rand weakened for the sixth consecutive session on Wednesday as global risk-off weighed on emerging-market currencies, while focus shifts to the ANC’s briefing on its plans to boost the local economy.
The rand is the worst-performing among emerging-market currencies in the past five days as investors shied away from riskier assets amid uncertainty regarding the US-China trade war and global growth as well as poor domestic data. The rand weakened further on Tuesday after Absa purchasing managers’ index fell to a decade low in September.
The SA Reserve Bank painted a gloomy picture of SA’s fiscal circumstances on Tuesday, citing troubled state-owned entities and global factors as main risks to the SA economy.
Investors are waiting for the ANC to announce its plan to revive SA’s economy, at a briefing on Wednesday.
“Yesterday’s results will underline how desperately a sensible, sustainable and effective economic policy and stimulus is needed. Let us hope that today’s unveiling of an economic stimulus plan promised by the ANC delivers as it is clear from yesterday’s monetary policy forum that the SA Reserve Bank considers fiscal and trade risks barriers to further rate cut,” RMB economist Siobhan Redford said.
US manufacturing data, released on Tuesday, dropped to a decade low, fuelling concerns about the health of the world’s largest economy and weighing on global sentiment.
“The market now awaits the US nonfarm payroll number on Friday, to see whether the Institute of Supply Management ISM number was merely a blip on the radar or if there will be another bad data set out of the US. Should this be the case we could see global growth and the trade war getting renewed energy, and the market will be headline-driven again,” TreasuryOne currency dealer Andre Botha said.
At 10.15am, the rand had weakened 0.38% to R15.3866/$, 0.2% to R16.7947/€ — reaching its lowest level in just over a month during intraday trade — and 0.13% to R18.8914/£. The euro had weakened 0.15% to $1.0915.
Gold was flat at $1,479.63/oz while platinum lost 0.47% to $873.16. Brent crude was down 0.19% to $59.10 a barrel.
Source: businesslive.co.za
