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Rand down nearly 1% against dollar in early trade

Jul 02 2018 10:08
Jan Cronje

The rand weakened in early trade on Monday morning, losing almost 1% against the dollar. 

At 10:04 it was trading at R13.84/$, down 0.85% on the day. 

Analysts say geopolitics - especially the trade war between China and the US over market access and tariffs - are likely to keep the local currency on the back foot. 

Local data set for release on Monday includes the Purchasing Managers' Index (PMI) and vehicle sales. 

"[These] are unlikely to come in very firm [and] weak numbers will add to the pressure on the rand," said Bianca Botes of Peregrine Treasury Solutions in a morning note. 

The US will also be releasing PMI, as well as manufacturing data, which could boost the greenback if positive, said Botes.

She expects the rand will trade in a narrow band between R13.50/$ and R14.00/$ this week. NKC African Economics, meanwhile, said in a research note it expects the local currency to trade between R13.50/$ and R13.85/$.

Andre Botha, senior currency dealer at TreasuryONE, said the rand would likely again track the ups and downs of the dollar this week. 

"With no local factors weighing on the rand at the moment, the rand will follow the movement in the US dollar quite closely, and with President Trump kicking up dust everywhere we need to brace ourselves for volatility to come."

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rand  |  markets  |  currencies
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