Picture: 123RF/LEON SWART
Picture: 123RF/LEON SWART

The rand was weaker against major global currencies on Thursday morning, looking set to extend a week of losses against the dollar due to risk-off trade.

European data on Wednesday once again disappointed, helping to send the rand 1.4% lower against the dollar, its worst performance in more than a month.

Global activity was subdued on Thursday, with the rand extending its losses ahead of the main local event of the day, producer inflation data at 11.30am.

At 9.40am the rand was 0.24% down at R14.4818/$, 0.19% lower at R16.1466/€ and 0.25% weaker at R18.6832/£. The euro was flat at $1.115.

Global focus remains on US corporate earnings, which have delivered a series of positive surprises for investors this week. Amid a rally in the dollar, markets are closely watching US GDP data on Friday.

In the current environment the bias was for further rand weakness, but the recent sell-off may be somewhat overdone and the local currency may stage a mild recovery, said Rand Merchant Bank analyst Nema Ramkhelawan-Bhana.

“Indeed, one-month implied volatility for the rand is still well below its six-month average, despite us drawing ever closer to what has been deemed as the most highly contested national elections in 25 years.”