ANC elections could lead to big rand moves
The rand was weaker against the dollar on Thursday just before midday, with the local market now focused on the ANC’s national elective conference at the weekend.
The rand started the week under pressure, trading range-bound between the R13.68/$ and R13.60/$ levels, but resumed its rally, which had lost steam. The rand closed 1.36% firmer against the dollar on Wednesday’s on improved sentiment.
Easing inflation and renewed confidence in SA’s judiciary supported the rand and local bonds. Inflation for November eased to 4.6% in November from 4.8% in October, reported Statistics SA.
The High Court in Pretoria ordered President Jacob Zuma to set up judicial commission of inquiry into state capture, headed by the chief justice.
A rather dovish tone from the US Federal reserve on Wednesday evening also provided support to rand gains. The Fed lived up to expectations by increasing interest rates but still bemoaned inflation, which remained stubbornly low.
As the ANC’s conference draws near, the market is expected to trade with caution, as the "outcome of this weekend will probably hold in a big move for the rand and it could be a wise decision to not speculate on the outcome," TreasuryOne currency dealer Gerard van der Westhuizen said.
At 11.31am the rand was at R13.5006 to the dollar from R13.4549, at R15.9640 to the euro from R15.9142‚ and at R18.1625 to the pound from R18.0468.
The euro was at $1.1825 from $1.1827.