Rand slips as euro comes under pressure from Italy
The rand is tracking a weaker euro against the dollar but pares losses slightly after August trade statistics
The rand was weaker against the dollar on Friday afternoon, taking its cue from the euro, which came under pressure from Italian politics.
The anti-establishment Italian government has decided on a budget for 2019 that has put it on a collision course with the EU, analysts said.
Italy’s government is insisting on running a 2.4% budget deficit, which is above market expectations and sent Italian sovereign bonds rates to their highest yield in months, said BK Asset Management MD Boris Schlossberg. Further volatility is expected, with EU officials already warning Italy’s financial system is at risk.
Local news was more positive, with SA posting a trade surplus of R8.8bn in August, well ahead of the Trading Economics consensus forecast of R5bn.
The year-to-date trade surplus of R2.66bn is a deterioration on the surplus for the comparable period in 2017 of R39.93bn, the South African Revenue Service (Sars) said.
Exports year-to-date increased by 5% while imports for the same period showed an increase of 10.4%.
At 3pm, the rand was at R14.1518 to the dollar from R14.1266, at R16.3984 to the euro from R16.4431, and at R18.4578 to the pound from R18.4787. The euro was at $1.1587 from $1.1641.
The benchmark R186 government 10-year note was last seen at 9.015% from 8.98%.