Rand firmer on do­mes­tic data, JSE lower

Cape Times - - PRICES - Sizwe Dlamini

THE RAND opened with its best foot for­ward yes­ter­day with all eyes on the re­lease of South Africa’s man­u­fac­tur­ing pro­duc­tion and min­ing fig­ures for May.

Man­u­fac­tur­ing pro­duc­tion rose by 2.3 per­cent year-on-year in May, af­ter lift­ing moder­ately by 1 per­cent in April, while min­ing pro­duc­tion con­tin­ued its down­ward tra­jec­tory drop­ping for the third con­sec­u­tive month by 2.6 per­cent year-on-year.

Cor­po­rate trea­sury man­ager at Pere­grine Trea­sury So­lu­tions, Bianca Botes, said while fun­da­men­tals and eco­nomic data still mat­tered in the cur­rency mar­ket, the ef­fects of the US/China trade war and tar­iffs were felt mostly by lag­ging economies such as South Africa.

“Although many agree that the rand is cur­rently over­sold, one can­not merely use that as­sump­tion to pre­dict its trend and move­ments. In such sit­u­a­tions, pol­i­tics dom­i­nates the en­vi­ron­ment,” she said.

At 5pm yes­ter­day, the rand bid 10c stronger than Wed­nes­day’s same time bid at R13.33 to the dol­lar. Against the pound, the lo­cal unit was 17c firmer at R17.63 and to the euro, the cur­rency ral­lied 16c to R15.58.

Se­nior cur­rency dealer at Trea­suryOne, An­dre Botha, said there was still some risk-ap­petite out there for risky as­sets.

“Should the lat­est trade war drama play out, we can ex­pect the rand to start driv­ing lower, but for the mo­ment ex­pect the rand to trade within ranges as we await news from abroad.

“Usu­ally, emerg­ing mar­kets are joined at the hip and with bad news flood­ing out of Turkey, we would have ex­pected some con­ta­gion ef­fect seep­ing into the South African mar­ket. The fact that this is not the case con­firms that the mar­ket is look­ing at the Lira is­sue as coun­try spe­cific and not as a broad-based emerg­ing prob­lem,” said Botha.

The lira reached its weak­est rate ever rate against the green­back yes­ter­day.

Mean­while, JSE stocks re­treated with the blue chip Top40 in­dex sink­ing 0.73 per­cent to 50 672.38 points, while the broader all share in­dex gave up 0.67 per­cent to 56 849.36 points.

Among ma­jor losers were Intu Prop­er­ties, which dropped 5.24 per­cent to R31.30 and Sibanye, which de­clined 4.48 per­cent to end the ses­sion at R7.68.

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