The rand and stocks hit hard

JOHANNESBURG – The rand weakened significantly yesterday and moved to test the R18 barrier against the dollar during morning trade on the failure of the US government to vote for the rescue bill which would have rallied the world markets.

The rand ran deeper into the severe down case, reaching R17.90 before pulling back to bid at R17.71 by 5pm.

The markets await implementation of the $4trillion (R70.2trillion) US’s emergency relief package for corporates to support the economy as it faces headwinds from the coronavirus (Covid-19).

Investec chief economist Annabel Bishop said there was great uncertainty in financial markets, and the longer it took to implement the US stimulus package, the more risk-off could elevate.

“Global markets worry that a global recession is likely. The global recession may well prove more severe than that of the global financial crisis, which is also worrying market players,” Bishop said.