Rand falls from an eight-month high against the dollar
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JOHANNESBURG – The rand fell from an eight-month high against the US dollar on Tuesday as local factors moved to the fore, according to NKC Research, after a strong rally as Joe Biden beat Donald Trump in what was arguably the biggest presidential race.
News of an arrest warrant issued for ANC top official Ace Magashule pushed the rand weaker in afternoon trading on Tuesday. The domestic unit had climbed to R15.21/$ on Monday, its strongest since March 5, as markets went into a frenzy on drugmaker Pfizer's announcement that its trial vaccine has been highly effective in preventing Covid-19.
Chief trader at Standard Bank Warrick Butler said a move back to R15.50/$ would likely see further supply from exporters. “But should we start to see sustained position covering from offshore entities, I can easily see a quickfire move back to R15.85/16 a dollar due to lack of liquidity and weak short positions.”
Meanwhile, the latest statistics showed that total manufacturing production was down 14.4 percent during the first three quarters of 2020 compared with the same period a year earlier, indicative of the difficult year the sector has had.
At the close of local trade, the rand was bid 1.54 percent weaker at R15.64 a dollar, after trading in range of R15.37 to R15.71 a dollar. The domestic unit traded firmer overnight but steadied ahead of the South African open. Expected range today R15.40 to R15.70 a dollar.
South African bourse
The JSE All Share (+0.63 percent) ended in the black on Tuesday, building on Monday’s gains after vaccine news sparked a global rally. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.30 percent) traded higher.
Brent crude oil
The Brent oil price remained on the front foot on Tuesday fuelled by hopes that a Covid-19 vaccine could soon be on the horizon. At the close of local trade, benchmark Brent crude futures quoted 0.89 percent higher at $42.84 per barrel. Crude prices traded steady during Asian trade this morning.
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