Rand on track for second week of losses
Finance minister Tito Mboweni’s economic recovery plan is expected to be discussed at this weekend’s ANC NEC
The rand looks set for a second consecutive week of losses as global risk-off sentiment pushed emerging-market currencies lower and investors digested talk of impeaching US President Donald Trump.
The focus locally is likely to shift towards the ANC’s national executive committee (NEC) meeting, which is due to meet at the weekend. Finance Minister Tito Mboweni’s economic recovery plan is likely to be discussed at the meeting.
“I am not too sure how many of these policy visions have been put into place yet so you can understand if Moody’s Investors Service is not going to buy into just another statement of intent without seeing some proof of implementation,” said Standard Bank currency trader Warrick Butler.
“The market has been waiting very impatiently for some progress on the Eskom restructuring and yet we still don’t even have a CEO to run the SOE [state-owned enterprise] yet.”
The local currency is more than 1% weaker against the dollar so far this week, according to Iress, after breaking through R15/$ to reach its lowest level in three weeks. Investors rushed to safe-haven assets after the US House of Representatives said it will launch an impeachment inquiry into Trump over allegations that he sought assistance from Ukraine to investigate former US vice-president Joe Biden.
“We are all well aware that markets and uncertainty do not go well together, a phenomenon which was reinforced this week as risk aversion on the back of the Trump debacle saw a renewed sell-off in emerging-market assets,” said Peregrine Treasury Solutions treasury partner Bianca Botes.
At 10am, the rand had weakened 0.29% to R15.0862/$ and 0.28% to R16.4705/€ while it was flat at R18.5237/£. The euro was little changed at $1.0918.
Gold was down 0.36% to $1,498.94/oz while platinum was flat at $927.38. Brent crude lost 0.42% to $62.38 a barrel.