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Rand rides Mboweni wave - but strong dollar remains a threat

Oct 10 2018 10:05
Fin24

The rand opened trade on Wednesday morning on the front foot after gaining 40 cents to the dollar after Tito Mboweni was named finance minister on Tuesday afternoon. 

The local currency, which briefly fell below 15/$ in the early afternoon on Tuesday as uncertainty around the fate of Nhlanhal Nene lingered, ended up 1.8% stronger against the greenback, an indication of positive market reaction to the appointment of finance chief of the former SA Reserve Bank governor.

It opened at R14.56/$ and was trading at R14.61 to the greenback at 09:23. 

Bianca Botes of Peregrine Treasury Solutions said in a morning note that while Tuesday’s strengthening reflects confidence the new minister, the currency would continue to feel the pinch from a strong dollar and a risk-averse global market in the months to come.

NKC African Economics said in a note to clients that markets welcomed the "harmonious transition". 

“President [Cyril] Ramaphosa made it clear that he was confident Mr Mboweni will bring much needed leadership after serving 'as former governor of the Reserve Bank and before that as minister of labour …',"  it said. 

It forecast the daily trading range at between R14.40/$ and R14.70/$.

Local data set for release on Wednesday includes the SACCI Business Confidence Index at 11:30.  

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tito mboweni  |  cyril ramaphosa  |  markets  |  currencies  |  rand
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