Rand hovers close to two-week low amid jittery global markets
Oanda market analyst Stephen Innes says there is ‘a bizarre rinse cycle where traders are taking extreme views on just about everything’
The rand was relatively calm on Friday morning, but stayed near a two-week low against the dollar, after a topsy-turvy week for the markets.
The fortunes of the local currency are largely tied to the external environment, which remains highly uncertain.
The rand started off the week on a positive fashion, before subsequently reversing course on global growth concerns.
“We’re going through a bizarre rinse cycle where traders are taking extreme views on just about everything while spending the next 12 hours building a case to justify their what-if scenarios,” said Stephen Innes, market analyst at Oanda.
Innes was referring to an incident earlier in the week in which Huawei top executive was arrested in Canada for allegedly violating sanctions against Iran.
The arrest of Meng Wanzhou came just days after China and US announced a truce in the so-called trade war, which is seen a potentially damaging to the world economy.
US nonfarm payrolls report are likely to take centre stage in the afternoon amid speculation that US Federal Reserve could pause in its interest rate-hiking cycle.
The US Fed has been one of a handful of major central banks in the developed markets that have raised rates, boosting the dollar at the expense of the rand and other currencies.
At 9.29am, the rand had lost 0.26% at R14.0826/$, 0.19% to R16.0097/€ and 0.17% to R17.9849/£. The euro was 0.08% weaker at $1.1369.
Local bonds were relatively stable at weaker levels. The yield on benchmark R186 bond was at 9.065%, from 9.055%.