Rand weakens above R14/$ as mining production disappoints
The mood on global markets is optimistic, but weak local data has raised concern over the country’s third-quarter economic performance
The rand weakened back above R14 to the dollar on Thursday afternoon, despite a sense of optimism in global markets.
Investor focus is on the US Federal Reserve monetary policy announcement at about 9pm local time, although the world’s most influential central bank is not expected to raise interest rates.
At 2pm, the rand was 0.77% softer against the dollar at R14.007, down 0.65% to the euro at R15.9832, and 0.56% to the pound at R18.3528. The euro had lost 0.13% to $1.1411.
The US mid-term election on Tuesday has benefited risk assets, with analysts citing the reduced risk of US President Donald Trump pushing a policy agenda that could rattle markets, analysts have said.
It will be interesting to see how the rand ends the week, and a close at R13.95 could mean further strength, with the next support level being R13.75, said Standard Bank currency trader Warrick Butler. “Politics and global dynamics have created this backdrop where the international investor market has lost a little bit of love for the rand and SA in general, while local sentiment has changed for the better.”
Some bad news for the local currency also came in the form of a softer gold price, while mining output data for September also surprised to the downside. Mining production slumped 1.7% on an annualised basis in September, below the Trading Economics consensus forecast of 0.3% growth.