SA rand slips

JOHANNESBURG. — The rand was weaker in late afternoon trade yesterday as the latest employment data presented another grim picture of a stagnating local economy.

The rand extended its weakness against the dollar despite a weaker greenback, with the euro gaining 1 percent to the US currency. Employment levels fell in the first quarter of 2017, though mining and construction both showed increases. Employment decreased by 48 000 jobs in the first quarter compared with the previous quarter, from 9,692-million in December 2016 to 9,644-million in March 2017, Statistics SA’s quarterly employment statistics report showed yesterday.

The economy is officially in a recession, but the rand has been supported by global factors, including positive emerging-market sentiment and inflows into the local bond market. The greenback weakened ahead of US Federal Reserve chairperson Janet Yellen’s speech late yesterday after European Central Bank (ECB) president Mario Draghi painted an upbeat view of the European economy.

“While Draghi is among the more dovish policy makers at the central bank, there has been persistent speculation that the ECB will announce further reductions in asset purchases later this year, and a more positive assessment of the economy from the ECB president may suggest he’s willing to back it,” Oanda analyst Craig Erlam said.

Sentiment was loaded against the local currency following news reports that Deputy Finance Minister Sfiso Buthelezi had questioned the efficacy of the Reserve Bank’s inflation-targeting policy — in contrast to Finance Minister Malusi Gigaba’s stated support for the Bank’s independence, following the public protector’s recommendation to change the Bank’s mandate. At 3.36pm the rand was at 12,9649 to the dollar from 12,8610, at 14,6449 to the euro from 14,3805 and at 16,5581 to the pound from 16,3618. The euro was at $1,1296 from $1,1181.— BDLive.