Rand tracks global market recovery
Easing concerns about the coronavirus outbreak have supported the rand this week ahead of the state of the nation address
The rand gained for the third day on Wednesday morning as global markets reacted positively to what seems to be the peak of the coronavirus outbreak, while the local unemployment rate remained steady in the fourth quarter of 2019.
The rand had benefited from an improved mood on global markets, strengthening from the psychologically important R15/$ this week. It performed best among emerging-market currencies tracked by Bloomberg on Tuesday evening.
At 11.49am, the rand had strengthened 0.11% to R14.7803/$, while it was little changed at R16.1371/€ and R19.1681/£. The euro was flat at $1.0918.
Global share markets nudged higher on Wednesday amid hopes that the worst of the coronavirus may have passed, although prevailing uncertainty about the outbreak kept investors wary, reported Reuters.
The unemployment rate in the fourth quarter of 2019 remained unchanged at near record highs of 29.1%, Statistics SA’s quarterly labour force survey (QLFS) revealed on Tuesday. This was the first time the rate had not decreased in the fourth quarter since 2008.
“The local unemployment rate remaining at 29.1% was well received, aiding the pullback on the rand to below R14.90/$,” said Peregrine Treasury Solutions treasury partner Bianca Botes.
“While a rate of 29.1% remains dismal, a further deterioration in the employment situation has been avoided as SA continues to battle an economy in disarray”, said Botes.
Locally, investors will watch the state of the nation address (Sona) on Thursday with an expectation that President Cyril Ramaphosa may provide a way forward with struggling state-owned power utility Eskom, or announce economic growth-boosting efforts.