Rand weaker as oil heads towards $80 a barrel
The rand was weaker against major global currencies on Wednesday morning, tracking a slightly weaker euro, as investor concerns about the implications of a trade war continued to weigh on markets.
The rand was range-bound on Tuesday, and is expected to continue to remain in that state until major events later in the week, including the release of US inflation data on Thursday.
A rising oil price has also come to the attention of the market.
Brent crude could test $80 a barrel this week, even as early as Wednesday, said Rand Merchant Bank analyst Nema Ramkhelawan-Bhana. "Iranian exports appear to be falling faster than anticipated, while US production growth is beginning to slow, raising concerns of tightening global supply."
Local focus is on retail trade data for July, due at 1pm, while the South African Chamber of Commerce and Industry business confidence index for August is due at 11.30am.
The local currency had found some support on Tuesday, when ratings agency Moody’s upgraded its outlook for SA’s banking sector from negative to stable.
The rand, however, failed to breach the R15/$ level on this news, and it seems only something positive globally will prompt the local currency to do so, said Standard Bank currency trader Warrick Butler.
At 9.45am the rand was at R15.1197 to the dollar from R15.0551, at R17.5324 to the euro from R17.4694, and at R19.694 to the pond from R19.6242. It was at $1.1596 to the euro from $1.1605.