The rand started on the back foot and on Wall Street, the bulls came out to play, with the Nasdaq surging 3%.
Rand under pressure at end of bumpy week
The rand is currently trading at R14.65 to the greenback. A move above R14.68 could open it up to weaken to R14.80, says Bianca Botes, Corporate Treasury Manager at Peregrine Treasury Solutions.
Describing the currency’s bumpy ride this week, she says the rand is continuously under pressure, “especially in this strong dollar environment, with domestic elements simply one of the key factors adding stress to the local unit”.
Referring to newly minted Tito Mboweni’s mini budget speech, she says policy always has a lagging effect and all that can be done is get the right people in the right positions and then give them the space and time to work. “Government as well as Treasury certainly look more stable this time around than at the previous mid-term budget.”
VISIT Fin24’s MINI BUDGET SPECIAL to catch up.
What are we waking up to?
The Rand is still recovering from its hangover from the medium-term budget policy statement and looking fragile at the moment. Add to that the euro/dollar rate is currently testing 1.1350 on the back of Mario Draghi’s dovishness and the US Fed vice-chair indicating that there is no stopping the Fed in hiking rates, has placed further pressure on the rand.
Taking a look at the stock markets, risky assets hardly reacted to the rebound in the US stock market overnight, and we have seen the Asian stock market down this morning. The Asian markets have probably reacted to the weakening in the Chinese yuan which does not bode well for emerging markets today.
We expect the rand to stay under pressure due to the falling yuan and the strength of the US dollar.
Latest currency indicators:
USDZAR 14.6676
EURUSD 1.1367
EURZAR 16.6644
GBPUSD 1.2822
GBPZAR 18.7974
AUDZAR 10.3121
CADZAR 11.1885
CNYZAR 2.1060
ZARJPY 7.6445
CHFZAR 14.6588
Brought to you by TreasuryONE
What are we waking up to?
The Rand is still recovering from its hangover from the medium-term budget policy statement and looking fragile at the moment. Add to that the euro/dollar rate is currently testing 1.1350 on the back of Mario Draghi’s dovishness and the US Fed vice-chair indicating that there is no stopping the Fed in hiking rates, has placed further pressure on the rand.
Taking a look at the stock markets, risky assets hardly reacted to the rebound in the US stock market overnight, and we have seen the Asian stock market down this morning. The Asian markets have probably reacted to the weakening in the Chinese yuan which does not bode well for emerging markets today.
We expect the rand to stay under pressure due to the falling yuan and the strength of the US dollar.
Latest currency indicators:
USDZAR 14.6676
EURUSD 1.1367
EURZAR 16.6644
GBPUSD 1.2822
GBPZAR 18.7974
AUDZAR 10.3121
CADZAR 11.1885
CNYZAR 2.1060
ZARJPY 7.6445
CHFZAR 14.6588
Brought to you by TreasuryONE
Good morning. Welcome to Fin24's Markets LIVE blog
Here's a quick snapshot:
The rand started on the back foot, opening at R14.62 to the US dollar and retreating almost immediately to R14.68. By 07:12 the local currency was trading at R14.65.
On Wall Street, the bulls came out to play, with the Nasdaq surging 3%.
Some notable quotes on the rally:
"We are seeing what we call a bottom fishing today," said Howard Silverblatt, senior analyst at S&P Dow Jones Indices.
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"After a severe sell-off its perfectly normal to see the market rebound," analyst Adam Sarhan said. "The key question: Is it a one-or two-day rally or is it a new trend?"
In Asia, shares turned lower after early gains, despite the overnight jump on Wall Stree as worries over corporate earnings, trade and the outlook for growth weighed on sentiment.