Rand weakens amid disappointing local data and politics, as dollar recovers
The rand remained weaker against major currencies on Wednesday, amid below-par economic data releases and political uncertainty.
The dollar continued to regain some of the losses it suffered last week‚ as tension in North Korea eased and the economic effect of then-Hurricane Irma proved less serious than initially expected.
Domestic risk factors also returned to the spotlight, notably concern that the ANC’s December conference may be derailed, after a court nullified the 2015 election of the party’s KwaZulu-Natal leadership.
TreasuryOne currency dealer Gerard van der Westhuizen said if the conference were to be delayed, it could be negative for both the rand and decisions by ratings agencies.
Local data on Wednesday also disappointed. After plunging from 40 to 29 in the second quarter‚ the Rand Merchant Bank Bureau for Economic Research business confidence index rose by six points, to a still-low 35 in the third quarter. Almost seven out of 10 respondents remained unsatisfied with business conditions — a troubling outcome to say the least‚ RMB said.
Retail trade sales growth slowed more sharply than expected in July‚ coming in at 1.8% year on year from June’s 2.9%, and against expectations of between 2.4% and 2.7%.
At 3.30pm the rand was at R13.1021 to the dollar from R13.0091‚ at R15.6611 to the euro from R15.5671 and at R17.3695 to the pound from R17.2777.
The euro was at $1.1954 from $1.1966.