File image: IOL
File image: IOL

WATCH: Rand dips weaker in late afternoon trade

By Compiled by Dhivana Rajgopaul Time of article published Sep 17, 2019

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JOHANNESBURG - The South African currency succumbed to souring global risk sentiment in the aftermath of an attack on Saudi Arabian oil refining facilities, while risk of escalating geopolitical tensions and retaliatory actions outweighed dovish expectations surrounding the US FOMC decision (and cautious Sarb) later this week according to NKC Research. 

In addition to the risk-off mode that the oil facilities attack stoked (affecting an estimated 5 percent of global oil supply), geopolitical tensions rose after the US president’s “locked and loaded” comments fuelled concerns of escalating conflict in the region, lifting oil prices to the highest level since May and sending risk-sensitive currencies of oil importers weaker. At the close of local trade, the rand stood at R14.58/$ and dipped weaker in late afternoon trade. Expected range today R14.60/$ - R14.90/$.

South African bourse

The JSE All Share (+1.28 percent) bucked the trend as it rose yesterday, with the likes of Sasol (+9.85 percent) benefiting from the sudden spike in international oil prices. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.05 percent) traded higher.

Brent crude oil

The Brent oil price traded steady throughout most of yesterday’s session, following the sudden jump in prices. President Donald Trump said the US would release oil from the Strategic Petroleum Reserve to keep the markets “well-supplied” in the wake of an attack on Saudi oil facilities. At the close of local trade, benchmark Brent crude futures quoted 0.66 percent higher at $67.11pb. Crude prices traded firmer during Asian trade this morning. 

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