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Rand weakens to R15/$ following Trump remarks

Aug 07 2019 15:15
Lameez Omarjee, Fin24

The rand weakened to R15.11 to the dollar on Wednesday afternoon.

TreasuryONE said in a note to clients that the local unit was on the backfoot after comments by US President Donald Trump.

"[Trump] said that the Fed must cut interest rates bigger and faster and stop ridiculous quantative tightening now. He also said that the Federal Reserve is too proud to admit mistakes," it said.

The rand was trading at R15.11 to the greenback by 15:14.

The rand also faced volatility late on Tuesday afternoon on the back of Moody's remarks related to Eskom's financial results. Moody's highlighted that cash-strapped Eskom was in need of an urgent turnaround strategy and that it would require "significant external support".

The local unit has also felt the heat in recent days as tensions in the US/China Trade War escalate.

Shortly after Trump's comments the rand reacted on a Bloomberg article about Eskom seeking government to take over its debt. "This caused a knee jerk reaction and the rand briefly breached the previous high of R15.1600 before settling around R15.10," TreasuryONE noted in a market update later on Wednesday. 

"The rand is looking nervy and we could be in for a bumpy ride in the short term with quite a lot of volatility."

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