SA rand in limbo

JOHANNESBURG. — The rand was flat in morning trade yesterday as the euro tracked slightly stronger against the dollar in anticipation the European Central Bank (ECB) will adopt a more hawkish stance towards monetary stimulus.

Analysts said the rand was expected to remain range bound yesterday as markets await nonfarm payroll figures from the US on Friday as well as a possible downgrade of SA’s sovereign credit rating from Moody’s. At 9.02am the rand was at 13,1389 to the dollar from 13,1219. It was at 14,7738 to the euro from 14,7415 and at 16,8938 to the pound from 16,9095. The euro was at $1,1244 from $1,1234. South African unemployment for the first quarter of 2017 was unlikely to move the market, but along with trade surplus data from Wednesday “may well be key pieces of the puzzle we are building to show Moody’s that a downgrade of our credit rating should be avoided,” TreasuryOne dealer Gerard van der Westhuizen said.

“Overall the rand is still in limbo on a relatively short-term basis,” Standard Bank trader Warrick Butler said.

Statistics SA is expected to announce unemployment data for the first quarter of 2017 at 12.30pm.

Trading Economics forecasts a marginal increase in the unemployment rate to 26,7 percent, from 26,5 percent in the fourth quarter of 2016.

Moody’s is expected to pronounce on SA’s creditworthiness on either June 2 or June 9. On Wednesday the South African Revenue Service announced a trade surplus of R5,08 billion for April, worse than the expected R7,4 billion. Nedbank economists said on Wednesday trade volatility would likely continue through the course of 2017, but not significantly influence decisions made by the Reserve Bank monetary policy committee.