SA rand backtracks

JOHANNESBURG- The rand was a lot weaker yesterday morning, in a move that emphasised its vulnerability to global market swings.

The local currency flirted with 13to the dollar earlier this week before reversing course as global risk aversion took hold.

Markets are growing increasingly jittery about whether US President Donald Trump will be able to garner the support he needs to push through his pro-growth agenda. The uncertainty negatively affected the dollar and US stocks in particular. This did nothing to help the rand, though, which was dragged to session lows of 13,41 to the dollar.

“The dollar weakness should be helping the rand but the acute risk aversion has investors running scared,” TreasuryOne dealer Phillip Pearce said in a note.

“US Treasury yields have tumbled as we see a flight to safety.”

The weaker rand poses an inflation risk. Consumer inflation has been moderating for several months since peaking at 7 percent in February 2016. At 9.29am, the rand was at 13,2881 to the dollar from Wednesday’s 13,2048, at 14,8087 to the euro from 14,7307 and at 17,2294 to the pound from 17,1158. The euro was at $1,1143 from $1,1155. — BDLive.