The rand fell back over R14/$ on Thursday
The rand fell back over R14/$ on Thursday

After weakening back over R14/$, R16/€ and R18/£ on Thursday, the rand managed to claw its way to R15.97/€ and R17.94/£ by 7am on Friday morning.

But it failed to get back into the 13s against the dollar, settling at about R14.05/$ after weakening to R14.21/$ from R13.83/$ on Thursday.

Image: Iress

Thursday’s weakening of the rand was generally blamed on SA’s third-quarter current account deficit coming in at R176.6bn, a deterioration from R167.4bn in the second quarter.

Peregrine corporate treasury manager Bianca Botes said in a note e-mailed on Thursday night that the “soft” current account figure added to the gloomy outlook on the rand already created by load-shedding and its potential effect on economic growth in 2019 along with parliamentary approval to amend section 25 of the constitution to open the way for land expropriation without compensation.

“Since SA, along with other emerging markets, has high debt which is mostly foreign denominated, the ability to service this foreign debt diminishes as US interest rates rise, putting strain on an already severely strained local fiscus,” Botes said.

The Reserve Bank is scheduled to release November’s foreign exchange reserves on Friday morning, which are expected to have remained at about October’s R50.17bn.

The JSE may halt a two-day slide, judging from a muted rebound in Asian markets on Friday morning after US President Donald Trump indicated a truce in his trade war with China was on again.

Tencent was up 2.96% to HK$313.20, indicating its 31%-owner Naspers may recoup some of Thursday’s 4% drop to R2,755.

Image: Iress

Naspers appears to be recovering from its dive to RR2,370 at the end of October, but has not managed to regain R3,000 yet.