Rand firmer as market eyes Italy and global growth
The local currency is firmer against major global currencies despite the risk-off tone of global markets this week
The rand was firmer on Friday afternoon, brushing off gloomy Chinese economic data and political risks in Italy.
Earlier, Chinese economic growth for the third quarter came in at a nine-year low, further reinforcing fears that ongoing trade conflict with the US is slowing the world economy.
A re-assurance from China’s central bank governor that the nation’s economy remains solid seemingly helped calm investors, with Chinese stocks rebounding.
Local news was largely absent, with focus remaining on next week’s medium-term budget policy statement (MTBPS), which is being viewed as a key test of the government’s promises to both rein in the deficit and re-arrange spending in way that will stimulate growth.
With a relatively light data calendar, market direction is likely to be driven by risk appetite, as investors continue to digest Chinese growth data and the EU’s deliberations on Italy’s budget, said Rand Merchant Bank analyst Mpho Tsebe.
Italy is also facing the possibility of a downgrade of its sovereign debt rating by Moody’s later this month.
At 3pm, the rand was at R14.3685 to the dollar from R14.4519, at R16.4740 to the euro from R16.5493, and at R18.7199 to the pound from R18.8096. The euro was at $1.1466 from $1.1451.