The rand recorded its best week since the beginning of January by Friday’s close, after SA escaped a widely expected negative review from Moody’s Investors Service.
The rand closed Friday 0.24% stronger at R14.0893/$, pushing its gains since March 29 to 2.83%. Over the same period it also firmed 2.83% to R15.805/€ and 2.81% to R18.3598/£, its best performance against the euro since the first week of January and against the pound since the first week of February.
Global markets have also been favourable, with progress reported in the US-China trade talks, while Chinese data has also beaten expectations.
Gains in the rand on Friday came as a US jobs report showed that wage growth in the world’s biggest economy was weaker than forecast in March, supporting the argument for the US Federal Reserve to refrain from hiking interest rates anytime soon. US employers added 196,000 new jobs, the country’s labour department said.
Trading Economics had forecast 180,000 new jobs.
Along with the boost from Moody’s decision last Friday not to issue a review on SA’s debt, which is one rung above junk status, the currency was also supported by Eskom’s assurance that electricity supply disruptions would be limited during the winter months, Rand Merchant Bank analyst Nema Ramkhelawan-Bhana said.
Domestic focus is now expected to shift increasingly to the looming general election. “Electioneering is in full swing ahead of the May 8 poll, with political parties vying for votes in a less-than-ideal macroeconomic environment, characterised by high levels of joblessness and low levels of productivity growth,” Ramkhelawan-Bhana said.
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