File image: IOL
File image: IOL

WATCH: Rand claws back losses and steadies this morning

By Compiled by Dhivana Rajgopaul Time of article published Mar 3, 2020

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JOHANNESBURG - The rand was at the mercy of global factors as it whipsawed throughout the session according to NKC Research.

A weaker greenback offered some support, but weak PMI figures out of China undermined global risk appetite and dented emerging market sentiment. Moreover, Asia PMI dived back into contractionary territory in February, clearly reflecting the negative impact of the coronavirus outbreak on the region’s manufacturing, especially in Northeast Asia. As expected, China was the worst hit. But with the virus having gone global in the second half of February, we expect the downturn in sentiment and activity to turn more broad-based going forward. A pick-up in cases in the rest of Asia and outside the region are only likely to add to the initial hits to growth from tourism and supply chain disruptions triggered by China last month. At the close of local trade, the rand quoted 0.03 percent weaker at R15.64/$, after trading in range of R15.46/$ - R15.89/$. The rand clawed back losses during the New York trading session and steadied this morning. Expected range today R15.30/$ - R15.65/$.

South African bourse

The JSE All Share (+1.75 percent) tracked global stocks higher, which rose on the back of stimulus hopes. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.14 percent) traded on a firmer footing.

Brent crude oil

The Brent oil price underwent an abrupt rise early in yesterday’s session on hopes that Opec would ramp-up supply cuts to counter dwindling demand, but prices fell as the European session drew to an end. At the close of local trade, benchmark Brent crude futures quoted 1.73 percent lower at $50.52pb. Crude prices rose overnight.

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