Rand slightly weaker as pound claws back some losses
Sterling has recovered slightly as investors digest the prospect of a chaotic exit of the UK from the EU
The rand was marginally softer against major global currencies on Friday afternoon, faring slightly worse against the pound, as investors waited for further Brexit information.
A Tory party rebellion over UK Prime Minister Theresa May’s draft Brexit deal has raised the prospect of a shambolic exit from the EU, with the pound slumping 3.07% against the rand on Thursday.
On Friday at 2.30pm, the rand was down 0.62% against the pound at R18.2332, 0.39% against the euro at R16.1307, and 0.35% against the dollar at R14.2291.
Local factors are, once again, failing to drive the market, although parliament’s constitutional review committee’s adoption of a report endorsing a change to the constitute to allow for expropriation of land without compensation is on investors’ radar.
“Now begins a complex interplay of politics, policy and practicalities between parliament, the government and the executive, the political parties, interested parties and the courts. We expect a significant amount of noise from the EFF and ANC national executive committee (NEC) — more so if the courts interdict the process,” said Nomura head of capital markets research Peter Attard Montalto.
Focus next week will be on the Reserve Bank, which may move to increase interest rates. A stabilising rand and easing oil prices have raised some hopes that the Bank will keep interest rates unchanged, but it has recently issued repeated warnings about tightening global liquidity and ongoing geopolitical risks.
CORRECTION: November 16 2018
A previous version of this story stated that the rand was up 0.62% against the pound.