Rand volatility set to continue

THE RAND weakened yesterday after finishing the past week on a high.

James Paynter, the head market analyst at Dynamic Outcomes, said although the rand ended the past week on a high note, its performance from the beginning of this week had been rather abysmal, with the dollar steadily pushing higher.

“After opening below R13.40, we saw the rand just keep barrelling towards R14 against the dollar,” he said.

Paynter said it seemed that South Africa was in for another roller-coaster week. He said that, with global markets rather jittery and trade wars likely to simmer, the volatility should not be expected to end soon.

At 5pm, the domestic currency was bid 11 cents weaker than Friday’s same-time bid of R13.57 a dollar. Against the pound sterling, the rand was 14c softer at R17.88, while it eased 19c to R15.88 against the euro.

TreasuryONE dealer Andre Botha said the outcome of the Turkish elections could spur further recovery for emerging markets, as President Recep Tayyip Erdogan claiming victory saw the country’s lira appreciate 3% against the US dollar.

“This could be beneficial to the rand, as we usually expect some contagion effect to filter through the market and lead to some rand strength.”

Botha said it remained to be seen whether Erdogan would pursue his stance on having more control over Turkey’s monetary policy. If this happens, Botha said we could see the current sentiment shift to emerging market currencies turn around.

The day’s biggest gainers were Hosken Consolidated Investment, which climbed 4.12% to R135.56 a share. It was followed by Vivo Energy, which rose 3.17% to R26, while Santam appreciated 3.09% to R296.

Dis-Chem rose 2.09% to R26.87, and Telkom grew 1.36% to R49.16.

The losers included Exxaro, which plummeted 5.51% to R117.32 a share. It was followed by Kumba Iron Ore, which shrank 5.33% to R286. RCL Foods declined 4.29% to R17.40, while Barloworld sank 3.98% to R128.38 and Impala Platinum fell 3.88% to R20.30.