Rand slips amid pressure on emerging-market currencies
The rand was weaker against major global currencies on Thursday afternoon, tracking a softer euro, after disappointing eurozone data.
The flash reading of eurozone services purchasing managers’ index (PMI) decreased unexpectedly in April to 52.5 points, from 53.3 in March. This was below the market consensus of 53.2.
The only saving grace from the report was a rebound in the German services PMI, which helped offset some of the weakness in manufacturing, said BK Asset Management MD Boris Schlossberg. Still, Germany, which is the core of the European economy, remains highly vulnerable to a manufacturing slowdown, he said.
Emerging-market currencies were mixed, with the rand avoiding the losses of the Turkish lira, amid renewed concerns about political interference in that country’s central bank.
At 3.15pm, the rand had weakened 0.54% to R14.0609/$, 0.02% to R15.8104/€, and 0.31% to R18.3005/£. The euro was 0.51% weaker at $1.1242.
Given the lead-up to the Easter weekend, market activity is expected to stall and liquidity is expected to be thin, leading to erratic movements in currency markets, said Rand Merchant Bank analysts.