The rand was marginally firmer on Tuesday, attempting to regain ground after the previous session’s losses, as investors assessed geopolitical developments in the US.
The local currency fell as much as 1.6% in the previous session amid a risk-off mood that was largely driven by offshore investors who dumped riskier assets in favour of safe havens. The risk-off sentiment comes after the attempted assassination of former US president Donald Trump over the weekend, with bets increasing that Trump will win the November election.
“After the rand weakness on Monday as the emerging markets traded risk-off in the wake of the assassination attempt on Trump, news on interest rate cuts in the US helped the local currency recover some lost ground,” TreasuryOne currency strategist Andre Cilliers said.
“For now, with no interest rate cut expected locally on Thursday, the rand will look at the international front for cues,” Cilliers said.
At 10.33am, the rand had strengthened 0.25% to R18.1663/$ and 0.21% to R19.8026/€, while it was little changed at R23.5608/£. The euro was little changed at $1.0901.
Locally, investors await the interest rate decision by the SA Reserve Bank, due on Thursday.
“For now rates are expected to remain unchanged but market participants will be looking for clues from the governor as to their thinking on interest rates going forward,” RMB head of forex execution Matete Thulare said.
Investors will also keep a close eye on President Cyril Ramaphosa, who is scheduled to deliver his first address to parliament on Thursday. Investors expect Ramaphosa to touch on his coalition government’s priorities after May’s general election.
At 10.40am, the JSE all share had lost 1.18% to 81,186.74 points and the top 40 was down 1.35%. Precious metals had gained 0.34%. Industrials had fallen 1.5%, banks 1.3%, financials 1.22%, SA listed property 0.86%, retailers 0.24% and food producers 0.15%.
At the same time in Europe, the FTSE 100 was down 0.37%, France’s CAC 40 0.63% and Germany’s DAX 0.47%.
Earlier in Asia, the Shanghai Composite was unchanged, while Hong Kong’s Hang Seng fell 1.51% and Japan’s Nikkei gained 0.2%.
In the commodities market, gold gained 0.5% to $2,434.04/oz, while platinum lost 0.75% to $990.16/oz. Brent crude was 0.98% weaker at $84.04 a barrel.
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