Rand stable above R13/$ ahead of the week’s risk events
Global markets are somewhat subdued as investors eye events that could move the market, including central bank announcements and the US-North Korean summit
The rand was marginally softer against the dollar and euro on Monday afternoon, although it was flat against a weaker pound, with markets somewhat cautious ahead of risk events this week.
Markets are waiting for the outcomes of an historic meeting between US President Donald Trump and North Korean President Kim Jong-un on Tuesday, with analysts saying this could cause a spike in risk-off trade.
Although meetings between world leaders are not usually market moving, this summit will be closely watched, FXTM head of global currency strategy Jameel Ahmad said. "Assuming that the meeting goes as planned, there are a number of potential winners and losers from alternative scenarios of the summit ending positively or negatively," he said.
Much focus will also be on global monetary policy, with the US Federal Reserve widely expected to raise interest rates for the second time in 2018 on Wednesday.
Markets will also keep a close watch on the European Central Bank, which is widely expected to announce changes to its monetary-policy tapering plan on Thursday.
Data was light on Monday, but weaker-than-expected manufacturing numbers for the UK earlier put the pound under pressure.
The UK itself won’t be far from the headlines in the first half of the week, with jobs data due out on Tuesday, inflation numbers on Wednesday and two days of talks in parliament over the amendments to the Brexit bill, Oanda analyst Craig Erlam said.
Local bonds followed the softer rand, with the benchmark R186 trading at about 9% from 8.95% in the late afternoon.
Foreigners were net sellers of local bonds last week, shedding R15.8bn in local debt, according to the JSE’s weekly data.
At 3pm, the rand was at R13.1139 to the dollar from R13.1066, R15.4711 to the euro from R15.4228 and R17.5413 to the pound from R17.5440. The euro was at $1.1797 from $1.1775.