Moody's signage is displayed outside of the company's headquarters in New York. Picture: BLOOMBERG/ GETTY IMAGES/ RAMIN TALAIE
Moody's signage is displayed outside of the company's headquarters in New York. Picture: BLOOMBERG/ GETTY IMAGES/ RAMIN TALAIE

The rand was subdued on Friday afternoon, on track for its worst week in three months as investors await a ratings review by Moody's Investors Service.

Some analysts say the odds are high that Moody's will change SA’s outlook from stable to negative, which is likely to result in further losses for the rand.

“The rand is now completely at the mercy of Moody’s. Option one [negative outlook] has been priced in now, although expect a minor bit of fireworks on Sunday/Monday in any case,” Standard Bank currency dealer Warrick Butler said.

“Option two [negative watch] is my main fear, and this could see the rand head above the recent highs en route to the stratosphere,” Butler said.

FNB Wealth and Investments portfolio manager Kabelo Tshola said if Moody's keeps SA's outlook at stable, the rand could trade below R15/$.

“It would mean that Moody's has given us time to think about the policy adjustments that are needed to retain a stable rating in February,” Tshola said.

The local currency is down more than 3% this week, according to Iress data, after a sombre medium-term budget policy statement on Wednesday hurt investor sentiment.

At 4.12pm, the rand was flat at R15.1011/$ and R16.843/€, while it was 0.18% firmer at R19.5605/£. The euro was little changed at $1.1154.

The generic 10 year government bond also saw almost no movement, at 9.263% — its highest level in more than seven months, after weakening dramatically during and after the presentation of the medium-term budget. It has risen about 36 basis points, or 0.36 percentage points since before Mboweni began speaking on Wednesday. Bond yields move inversely to their prices. 

Gold was down 0.1% to $1,511.02/oz, while platinum had gained 0.49% to $936.49. Brent crude climbed 3.07% to $60.52 a barrel.

mjoo@businesslive.co.za