Rand reaches close to R14.40/$ as confidence weakens
The rand looked set for its fifth consecutive session of losses against the dollar on Wednesday, as the latter continued its rally on upbeat US corporate earnings reports.
US markets reached record highs on Tuesday, but global trade is mildly risk-off, amid less upbeat data elsewhere.
Earlier, a German business-confidence index for April disappointed, while the South Korean won dropped to a two-month low against the dollar, ahead of what is expected to be disappointing GDP data on Thursday.
On Wednesday afternoon, the rand was the third-worst performing of the 24 emerging-market currencies tracked by Bloomberg, behind the South Korean won and Turkish lira.
The rand, however, has spent almost a week losing ground against the dollar and is down about 2.5% from last Wednesday’s close of R13.9866/$.
At 2pm, the rand was 0.58% softer at R14.3372/$, having earlier reached R14.3899. It was 0.35% weaker at R16.0606/€ and off 0.66% to R18.5562/£. The euro was 0.15% weaker at $1.121.
The bid on the benchmark R186 government bond was at 8.565% from 8.54%.
Some of the pressure on the rand has come after it emerged on Friday that Eskom received a bailout from the government, while local data this week has also disappointed.
Earlier, the FNB/BER business confidence index showed that conditions remained gloomy in the first quarter. Business confidence fell to two index points from seven in the fourth quarter of 2018.
US corporate earnings reports are set to remain the dominant theme on global markets this week. Analysts said that despite the rally in the dollar, there is still some concern over the health of the US economy. US first-quarter GDP numbers are due on Friday, and are expected to confirm whether or not the dollar’s recent strength is justified.