Rand firms against the dollar as the market watches Donald Trump
Analysts say the rand has been oversold after its recent slide sent it to two-year lows against the pound and dollar, but domestic and international headwinds remain
The rand was firmer against major global currencies on Thursday afternoon, bolstered by stronger prices for some commodities.
Global market focus is on trade-war issues, with US President Donald Trump widely expected to announce the imposition of 25% tariffs on $200bn worth of Chinese imports later on Thursday.
"This would represent a significant ramping up of the trade war between the world’s two largest economies and show the US electorate ahead of the mid-terms that he will not shy away from his strategy, regardless of the warnings against doing so," Oanda analyst Craig Erlam said.
The rand has been caught up in general pressure on emerging markets this week, but the local currency has also reacted badly to news SA entered a technical recession in the second quarter.
Local focus has now turned to how the government will rein in its budget deficit, with the weaker rand reflecting investor concern that ratings agency Moody’s is now more likely to downgrade SA’s debt to junk status.
Moody’s said earlier it had downgraded its forecast for SA’s economic growth in 2018 to 0.7% from 1.5%, a move that the agency said was credit negative.
At 3pm, the rand was at R15.3105 to the dollar, from R15.4235 on Wednesday. It was at R17.8256 to the euro from R17.9367, and at R19.8128 to the pound from R19.9098. The euro was at $1.1643 from $1.1630.