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London tube terrorist attack spooks rand

Sep 15 2017 13:23

Cape Town - The rand instantly lost 5c to the US dollar on Friday following the news of a terror attack in London.

“Emerging markets are slightly on the back foot after the terror attack in the London Tube. USDZAR weakened instantly by 5 cents, now trading at R13.22,” said TreasuryOne in snap note following news of the attack. 

The rand dropped from R13.15 to the dollar to R13.20 immediately after the news, reaching a low of R13.22.

By 13:02 the local unit was trading 0.56% weaker at R13.19 from an overnight close of R13.12.

British police has officially referred to a fire on the underground, which took place at the Parsons Green Underground Station in London at 09:20 South African time, as a terrorist incident. 

“At present we are aware of a number of people who have suffered injuries,” said British police in an earlier statement. “It is too early to confirm the cause of the fire, which will be subject to the investigation that is now underway.”

RMB currency strategist John Cairns said global issues are certainly dominating rand movements currently.

"The swings over the past week have been almost all about EUR/USD, and no more so than yesterday when USD/ZAR moved almost exactly in line with the value of the dollar"

He said further volatility looks likely. "This would probably be the case even if the data calendar was empty but it will be even more so given the US figures this afternoon."

Data expected on Friday afternoon include US retail sales numbers for August; US industrial production data for August and the US University of Michigan Consumer Confidence Index data for September.

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