Rand hits record low as JSE firms
The rand touched a fresh record low on Friday, while the JSE ended firmer even as the outlook for SA remains gloomy.
The local currency weakened to an intraday worst of R19.52/$ — just a touch away from the low of R19.51/$ reached last Friday, as load-shedding ahead of winter weighed on the country’s growth outlook. Eskom has warned that 7,000MW-8,000MW being removed from the grid is on the cards. The dollar, meanwhile, is at its strongest level in six weeks.
“The risks to the rand remain heavily on the weaker side as local power issues and geopolitical tensions weigh on the local currency,” said TreasuryONE currency strategist Andre Cilliers.
At 5.36pm, the rand had weakened 0.45% to R19.4188/$, 0.97% to R21.0071/€ and 0.95% to R24.2011/£. The euro was 0.44% firmer at $1.0817.
Meanwhile, the JSE closed firmer amid mixed global peers as investors continue to monitor the situation around the debt ceiling in the US.
Republican House speaker Kevin McCarthy said on Thursday he was optimistic negotiators could reach a deal to raise or suspend the debt ceiling in time to hold a vote on it next week. President Joe Biden also expressed confidence during the week that negotiators would reach an agreement to avoid a default ahead of a potential June 1 deadline, the earliest date the Treasury could run out of cash to pay debts.
However, Bloomberg reported on Friday a group of Republican negotiators walked out of a debt ceiling meeting, with representative Garret Graves saying the White House team is “unreasonable”.
“Heading into next week, expect
US debt ceiling negotiations to dominate all news flow,” said CompareBroker.io chief analyst Jameel Ahmad.
“For as long as the current situation risks hanging over the head of global financial market sentiment and, in fact, financial market stability should the unreal thought of the US running out of money become reality, global economic data releases next week could very much be parked to the side of our attention,” said Ahmad.
The JSE gained 0.65% to 78,176 points and the top 40 was up 0.65%. The industrial metals and mining index added 1.72%, resources firmed 1.21%, banks garnered 0.71%, financials were up 0.7% and the precious metals and mining index advanced 0.63%.
At 6pm, the Dow Jones Industrial Average was 0.32% weaker, while in Europe the FTSE 100 added 0.19%, France’s CAC was up 0.61% and Germany’s DAX firmed 0.69%.