Rand's relief from Cabinet risk proves short lived | Fin24
 
Loading...

Rand's relief from Cabinet risk proves short lived

May 30 2019 12:08
Colleen Goko, Bloomberg

Now that South Africa’s cabinet has been announced, the rand can join its peers in being whipsawed by a trade war that has subdued markets worldwide.

The currency swung between gains and losses, a sign that while investors are relieved over President Cyril Ramaphosa’s cabinet decisions, they have bigger concerns right now. The nation’s stocks, which weren’t trading when the announcement was made last night, are up.

Trade talks between the US and China aren’t showing signs of progress, and it appears a new front may be opening between President Donald Trump’s administration and Europe. The dollar has risen four straight days against a basket of currencies to the highest level since December on a closing basis.

"The general risk environment is still subdued," said Nema Ramkhelawan-Bhana, an analyst at FirstRand Bank, in a note to clients. "For as long as high-frequency economic data continues to disappoint and US-Sino trade tensions escalate, markets will favour safe-haven assets, leaving emerging markets to consolidate gains where possible. That’s of little comfort to the rand market, with the bias of risk still to the upside."

The rand advanced 0.1% as of 10:28 in Johannesburg to R14.63 per dollar. By 12:06, it was trading at R14.59/$. The FTSE/JSE Africa All Shares Index added 0.9%, led by FirstRand. The nation’s stocks saw net foreign purchases of R2.5bn yesterday, the most since September, a day after they suffered their biggest net outflows on record.

rand  |  markets  |  currencies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What's your view on deep sea mining?

Previous results · Suggest a vote

Loading...