Rand slightly softer as focus shifts to state of the nation address
There are few catalysts to give the market direction, but traders’ attention is now on President Cyril Ramaphosa’s speech on Thursday
The rand was a little weaker against major global currencies on Wednesday morning, with little news or data to give the local unit much direction.
US President Donald Trump’s state of the union address on Tuesday failed to provide much direction for the markets, as it contained few major surprises. A political battle on how to fund border security continues to threaten another US government shutdown, with some speculation that Trump would announce that he will use his emergency powers to ensure the construction of a border wall.
The rand is expected to remain slightly range-bound on Wednesday, with market activity subdued by the closure of many Asian markets for the Lunar New Year.
“Today, we have an inkling that the rand could trade sideways as is feels like Groundhog Day with few events and data releases out today, much like the previous couple of days,” said TreasuryOne senior currency dealer Andre Botha.
At 9.40am the rand was 0.64% weaker at R13.4589, 0.47% softer at R15.3216/€ and had depreciated 0.47% to R17.4012/£.
Focus is now expected to shift to Thursday’s state of the nation address, as markets continue to scrutinise the government’s finances.
President Cyril Ramaphosa on Tuesday reassured investors in the mining sector that problems at embattled power-utility Eskom would be addressed. There is concern that the financial problems at the utility could entail power disruptions and high electricity tariff increases. It could also require taxpayers to fork out billions of rand more for a bail-out.