Rand 1% firmer to the dollar ahead of medium-term budget
The rand was firmer against major global currencies on Monday morning, with market focus this week squarely on the medium-term budget policy statement (MTBPS) on Wednesday.
Finance minister Tito Mboweni’s statement on Wednesday will be closely scrutinised for the details of how the government will rein in the deficit and rearrange spending to create economic stimulus.
Local market participants are likely to take little heed of ongoing scandals, including those involving VBS bank and the South African Revenue Service (SARS), ahead of the announcement, said Rand Merchant Bank analyst Nema Ramkhelawan-Bhana. Investors are likely to simply consolidate positions ahead of Wednesday.
Some focus is also on local inflation data, with consumer inflation data for September due on Wednesday and producer price inflation due on Thursday.
US GDP data on Friday is also expected to be closely watched, while global markets pay close attention to the ongoing Brexit saga, the Italian budget deficit and tension over the murder of a Saudi Arabian dissident.
Risk-sentiment was given a mild boost on Monday, with Asian stock markets cheering a Chinese stimulus package unveiled at the weekend.
At 9.40am on Monday morning the rand was at R14.2846 to the dollar from R14.4488, at R16.4901 to the euro from R16.6421 and at R18.6908 to the pound from R18.8934. The euro was at $1.1544 from $1.1518.