File image: IOL
File image: IOL

WATCH: Rand comes under pressure by weak business confidence

By Compiled by Dhivana Rajgopaul Time of article published Feb 10, 2020

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JOHANNESBURG - The rand stumbled as downward pressure exerted by broad dollar strength was amplified by weak business confidence according to NKC Research. 

The South African Chamber of Commerce and Industry’s (Sacci) business confidence index slipped from 93.1 in December to 92.2 in January, with the release painting a sombre picture as supply-side constraints worsened. The local unit suffered through a tough January while the resumption of rolling blackouts punished fragile private sector consumption. Better-than-expected US jobs data provided an additional boost for the trade-weighted greenback. The local calendar will be dominated by the president’s State of the Nation Address (Sona) this week. Investors will be hoping for clarity on recent comments relating to the possible use of pension funds to reduce energy parastatal Eskom’s debt burden. At the close of local trade, the rand quoted 1.24 percent weaker at R15.10/$. The rand traded firmer this morning. Expected range today R14.90/$ - R15.15/$.

South African bourse

The JSE All Share (-0.44 percent) ended in the red on Friday, in step with global stock markets, as coronavirus fears deepened. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.98 percent) traded lower.

Brent crude oil

The Brent oil price traded weaker last week after Russia said it needed more time to mull Opec+ supply cuts – compounded by a slowdown in global fuel demand. At the close of local trade, benchmark Brent crude futures quoted 1.49 percent lower at $54.34pb. Crude prices traded slightly stronger during Asian trade this morning. 

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