Rand slides back after five-day burst

The rand snapped its five-day winning streak as SA entered its third week under national lockdown and uncertainty over the economic effects of the Covid-19 outbreak continued to dominate global sentiment.

After initially gaining to trade below R18/$, the SA currency weakened 1% to R18.15/$ during the day as its emerging-market peers also faltered, with hopes fading that the spread of Covid19 will soon peak. The rand tends to suffer in times of global turmoil as investors search for safety in developed-country assets such as US treasuries. US stocks were lower in early trade as investors braced for quarterly earnings reports that would start giving a glimpse into damage due to the pandemic. Trade was light across the globe as some markets were closed for Easter Monday.

At 2.47pm the rand had weakened 0.45% to R18.0339/$, 0.28% to R19.6983/€ and 0.82% to R22.5251/£. The euro was flat at $1.0924.

The rand, which ended 2019 at R13.9909/$ is down 23% in 2020 so far, having slipped to a record R19.3453/$ on April 6.

Gold was down 0.24% to $1,690.83/oz and platinum 0.57% to $742.25. Brent crude lost 1.57% to $31.30 a barrel despite a groundbreaking deal to limit supply.

Opec+ reached an agreement on Sunday to cut production output by 9.7-million barrels a day in May and June to support falling oil prices. The price of Brent crude has dropped more than 52% so far this year, and analysts are not convinced that the reduction in supply will be enough to compensate for the collapse in demand.

OIL PRICES COULD QUICKLY CHANGE IF OPTIMISM GROWS THAT THE US AND EUROPE COULD SEE THEIR ECONOMY OPENING BY JUNE

“Oil prices should remain heavy in the short term, but that could quickly change if optimism grows that the US and Europe could see major parts of their economy opening by June,” said Oanda market analyst Edward Moya.