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Johannesburg - The rand was softer at midday on Monday as persistent negative sentiment stemming from the current account deficit and labour tensions have kept the market bearish.
“You can’t get rid of the trade balance and labour unrest on a technical basis‚” said Ockert van Niekerk‚ head of trading PSG.
Van Niekerk said that despite comments by Reserve Bank Governor Marcus last week that the rand was “overdone”‚ known factors such as the trade deficit and labour tensions were still present and had put the domestic currency on the back foot. “Markets are still too cautious to be bullish‚” he said.
The week ahead is busy in terms of local data releases‚ which will provide insight into the state of the domestic economy and have the potential to move markets.
All eyes will be on the Q4 current account deficit figures in the Reserve Bank’s March quarterly bulletin to be released on Tuesday. The deficit is expected to ease slightly to 6.0% of GDP from 6.4% in Q3 (seasonally adjusted and annualised). On Thursday‚ both mining and manufacturing production figures are due.
“We’ve seen some technical support at R9/$ and some resistance at R9.20/$‚ but if it breaks through R9.20/$ we’re likely to see the rand drop to around R9.40 to the dollar‚” said Van Niekerk.
At 11:32 the rand was bid at R9.1461/$ from R9.0866/$ at Friday’s close.
The local currency was bid at R11.8869/€ from its previous close of R11.8127/€ and at R13.6370 against sterling from R13.5463 before.
The euro was bid at $1.3002 from $1.2987 at Friday’s close.
Despite recent speculation‚ Marcus said last week last week that inflationary pressures stemming from recent exchange rate weakness and growth in unit labour costs meant that there was no room for the bank to cut interest rates.
“You can’t get rid of the trade balance and labour unrest on a technical basis‚” said Ockert van Niekerk‚ head of trading PSG.
Van Niekerk said that despite comments by Reserve Bank Governor Marcus last week that the rand was “overdone”‚ known factors such as the trade deficit and labour tensions were still present and had put the domestic currency on the back foot. “Markets are still too cautious to be bullish‚” he said.
The week ahead is busy in terms of local data releases‚ which will provide insight into the state of the domestic economy and have the potential to move markets.
All eyes will be on the Q4 current account deficit figures in the Reserve Bank’s March quarterly bulletin to be released on Tuesday. The deficit is expected to ease slightly to 6.0% of GDP from 6.4% in Q3 (seasonally adjusted and annualised). On Thursday‚ both mining and manufacturing production figures are due.
“We’ve seen some technical support at R9/$ and some resistance at R9.20/$‚ but if it breaks through R9.20/$ we’re likely to see the rand drop to around R9.40 to the dollar‚” said Van Niekerk.
At 11:32 the rand was bid at R9.1461/$ from R9.0866/$ at Friday’s close.
The local currency was bid at R11.8869/€ from its previous close of R11.8127/€ and at R13.6370 against sterling from R13.5463 before.
The euro was bid at $1.3002 from $1.2987 at Friday’s close.
Despite recent speculation‚ Marcus said last week last week that inflationary pressures stemming from recent exchange rate weakness and growth in unit labour costs meant that there was no room for the bank to cut interest rates.
