Rand weakens in midday trade

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IOL world currency1 Graphic: Renjith Krishnan.

The rand was weaker in midday trade on Tuesday after SA’s current account deficit widened more than expected.

“The rand opened around R8.19 against the dollar this morning‚ buoyed by the expectant positive news out of the eurozone tomorrow‚” said Mark Kalkwarf‚ a senior portfolio manager from Iquad Group.

At 11.30am‚ the rand was bid at R8.2197 to the dollar from R8.1867 at Monday’s close. It was bid at R10.5206 to the euro from its previous close of R10.4424 and at R13.1584 against sterling from R13.0807 before.

The euro was bid at US$1.2779 from $1.2761 at Friday’s close.

“The rand could not hold on to its gains as the current account deficit came out far worse than expected at 6.4% (-R200bn) compared to consensus of 4.7% (-R146.9bn) of GDP. Mine unrest is also weighing negatively on the rand‚” Kalkwarf said.

“”It’s a shock for us; we were looking at a number of 5.5%. This reflects the tough trading conditions SA is currently experiencing. It doesn’t bode well for the balance of payment. This is going to put the rand under pressure‚” said Nedbank economist Isaac Mashego. - I-Net Bridge

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