Rand trades steady overnight
JOHANNESBURG - The South African currency traded on the back foot in Friday’s session as global risk sentiment soured according to NKC Research.
Mindful of the elevated near-term risks to the baseline, the rand is expected to benefit from an external backdrop and policy-led correction of the dollar.
Near-terms risks may stem from negative demand surprises in advanced economies, although authorities remain committed to strengthen stimulus response, which will support the rand’s carry allure.
In this regard, the ECB may underestimate the near-term downside risks to activity, but at this stage there is little more monetary policy could do to offset the drag.
After Thursday’s announcement, the ECB communication implies a soft cap on regional bond yields and spreads among sectors and jurisdictions.
The ECB’s focus appears to be on low and broadly stable real yields, while rising nominal yields on back of higher inflation expectations will likely elicit little response.
At the close of local trade, the rand quoted 0.90 percent weaker at R15.07/$, after trading in range of R14.90/$ - R15.15/$. The rand traded steady overnight. Expected range today R14.90/$ - R15.20/$.
South African bourse
The JSE All Share (+0.10 percent) inched higher during the previous trading session, as gains in large resources (+0.71 percent) stocks offset losses in major financial (-0.48 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.61 percent) strengthened.
Brent crude oil
The Brent oil price fell at the end of last week amid concerns of tighter economic restrictions in China and after EU leaders imposed travel curbs within the bloc. At the close of local trade, benchmark Brent crude futures quoted 2.29 percent lower at $54.65pb. Crude prices traded in a narrow band during Asian trade this morning.