Cyril Ramaphosa’s Sona fails to boost rand
The local currency is weaker on Friday morning, with analysts citing little in the state of the nation address to lift it
The rand was weaker against major global currencies on Friday morning, having failed to benefit from any of the news contained in President Cyril Ramaphosa’s state of the nation address (Sona) on Thursday evening.
There was little clarity on what exactly would be done to reignite economic growth, while the news that Eskom would be receiving further bailouts was negative, analysts said.
“While the tone of the address was upbeat and positive, the country remains in the dark as to what exactly the turnaround plan for the economy will entail,” said Peregrine Treasury Solutions corporate treasury manager Bianca Botes.
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At 9.50am the rand was 0.62% weaker at R14.4313/$, 0.78% softer at R16.3198/€ and 0.54% weaker at R18.3205/£. The euro was 0.16% firmer at $1.1308.
The rand, along with emerging-market currencies, has been boosted this week by dovish signs from the US Federal Reserve, with markets now pricing in a 100% chance of a 25 basis point cut in that country by the end of July.
Focus now shifts to next week's meeting between US President Donald Trump and Chinese President Xi Jinping, as investors wait to see if there will be progress in resolving the US-China trade war.
Some focus is also on the rising tension in the Middle East, amid reports that the White House held back on planned airstrikes on Iranian facilities overnight. This follows Iran’s alleged shooting down of a US drone over the Persian Gulf earlier this week.