Rand firmer ahead of risk events
Brexit and US-China trade war issues remain in focus, with all eyes on the G20 summit later in the week
The rand was slightly firmer against major global currencies on Monday morning, continuing to find support from a hawkish stance from the Reserve Bank, but ahead of risk events.
UK and EU officials put the final touches on a draft Brexit deal on Sunday, paving the way for a possibly contentious vote in the UK parliament in December.
All eyes, however, are on a Group of 20 (G20) meeting in Argentina later in the week, which may indicate how and when the US-China trade conflict will be resolved.
At 9.25am the rand was 0.52% stronger at R13.7777, 0.4% against the euro at R15.6449 and 0.51% against the pound at R17.6701. The euro was at $1.1356. The yield on the benchmark R186 government 10-year not last at 8.89% from 8.92%.
Local focus is on producer inflation data on Thursday, while the RMB business confidence index for the fourth quarter will be published on Tuesday.
FNB chief economist Mamello Matikinca says the index has remained below the 50-point neutral mark for 15 consecutive quarters. “Economic fundamentals remain dire and will likely keep confidence levels muted.”
SA’s economic performance will now be closely watched after the Reserve Bank opted not to provide additional stimulus, opting instead for a 25 basis point increase. Analysts said keeping rates on hold would not provide much benefit for the economy, with the move providing wiggle room in the event of exogenous shocks.