Picture: REUTERS
Picture: REUTERS

The rand was weaker against major global currencies on Tuesday afternoon, as pressure eased on the dollar due to abating concerns over global economic growth.

The local unit was faring worst against the pound, which was firmer despite Brexit uncertainty.

The UK parliament voted overnight to take over the Brexit process from UK Prime Minister Theresa May, who has managed to hold onto her position. A series of votes on Brexit is now expected on Wednesday.

Analysts said this outcome had decreased the chances of a hard-Brexit. Parliament was known to favour a soft Brexit and that it opposes no deal, said Oanda analyst Craig Erlam. “Perhaps Wednesday will throw up a few surprises but, like many other votes we’ve seen, it could also easily achieve very little and still leave all options on the table”

Emerging-market currencies were slightly weaker on Tuesday, with analysts citing stability in the dollar, as market concerns regarding faltering global growth abate a little.

At 2.15pm, the rand had weakened 0.82% to R19.0461/£, 0.36% to R14.3682/$ and 0.31% to R16.2467/€. The euro was flat at $1.1307.

The benchmark R186 government bond was bid at 8.735% from 8.715%.

Risk events continue to threaten volatility in the rand this week, with all eyes on Thursday’s interest-rate decision by the Reserve Bank, while a credit-rating determination by Moody’s Investors Service is due on Friday.

Investec chief economist Annabel Bishop said Investec had weakened its expected rand forecast somewhat, as investor sentiment has recently proved wary of SA, while the local currency had weakened during March.

In its “down-case”, Investec expects the rand will average R17/$ in the third quarter of 2019. This down-case includes assumptions of a ratings downgrade, weakening of ANC support in the elections, and continued load-shedding.