Rand and bourse open week on front foot

THE RAND was weaker yesterday morning but later gained, after a tumultuous week that saw the currency breach the R15 mark in what can be described as the worst week for the domestic unit and emerging markets in a while.

The rand gave most people a bit of a fright when it spiked to above R15 against the dollar.

TreasuryOne senior currency dealer, Andre Botha, said the reason for the sudden spike was the fact that Turkish lira weakened when the US threatened more sanctions.

“Looking forward to the week, we have seen the US dollar slide against most currencies. We expect the pullback was mostly due to the market correcting itself after the US dollar went on a tear the last couple of weeks.

“Speculation that the US and China are trying to settle their differences on trade tariffs will further help EM currencies should a deal be brokered, but it might take a while before we get there,” said Botha.

At 5pm, the rand bid 13c firmer than Friday’s same time bid at R14.65 to the dollar. Against the pound, the rand was 14c stronger at R18.69 and to the euro, the currency firmed 12c to R16.75.

Peregrine Treasury Solutions corporate treasury manager, Bianca Botes, said the debate about nationalising the SA Reserve Bank might feel like déjà vu, but the EFF’s motion before parliament did not impress the rating agencies at all.

“On Friday, Moody’s warned that there is not enough being done at the local government level to reel in fiscal spending to ensure policy stability, which just adds to South Africa’s credit rating and hence currency woes.”

Last week was a chaotic week for developing nations with stocks and currencies falling to near their lowest levels in more than a year.

JSE stocks, however, recouped some of those losses yesterday, with the blue chip Top40 index gaining 0.99 percent to 51 101.53 points, while the all share index inched up 0.88 percent to 57 145.62 points.

Top gainers among major movers were Barloworld, up 4.84 percent to R123.55, and Anglo American Platinum, which added 2.54 percent to R421.26. MTN dialled up 2.43 percent to R103.45, while Rand Merchant Investment Holdings increased 2.23 percent to R39. – Business Report Online