Rand’s volatility eases to one-year low
The rand was little changed on Tuesday afternoon, but volatility in the currency has dipped due to the shortened trading week.
Implied one-week volatility is at 11.79%, its lowest level since April 24 2018, with the local currency now the third-most volatile emerging-market currency tracked by Bloomberg.
One-month volatility, a period that covers the local elections, was at 14.82% on Tuesday afternoon, but below the 16.38% it has averaged for the past six months.
The rand weakened back above the R14/$ handle in late trade on Monday, and the rand could be losing some of its momentum ahead of the election, said TreasuryOne senior currency dealer Andre Botha. However, a definite move after an event related to the election would be needed to confirm this.
At 2pm, the rand was flat against most major currencies at R14.0476/$, R15.8869/€ and R18.3954/£. The euro was little changed at $1.1307.
The benchmark R186 government bond was last bid at 8.51% from 8.455%.
US corporate earnings and various economic releases are expected to be the dominant theme in markets this week. These include first-quarter Chinese GDP data, local retail sales numbers for February and consumer inflation for March, all of which are due on Wednesday.