WATCH: Rand loses some steam as unemployment hit an 11-year high
JOHANNESBURG - The South African currency lost some steam as the trading session progressed as unemployment hit an 11-year high according to NKC Research.
The local unit initially found shelter in fairly upbeat global sentiment as expectations for a US rate cut later today outpaced concerns of an ongoing contraction in Chinese factory activity amid protracted US trade tensions. The rand reacted negatively to news that the Q3 unemployment rate rose to 29.1 percent, although selling pressure on the local unit was partially eased by government’s unveiling of plans to complete the legal separation of Eskom into three entities by 2022. It was also announced that a new Eskom Chief Executive will be appointed next week. At the close of local trade, the rand quoted 0.36 percent weaker at R14.60/$, after trading in range of R14.53/$ - R14.72/$. The rand steadied overnight. Expected range today R14.50/$ - R14.80/$. The budget statement will dominate local news today, with the focus shifting to this afternoon’s FOMC decision, though the releases might not have much market impact. Moody’s decision is due Friday
South African bourse
The JSE All Share (-0.08 percent) ended lower yesterday, dragged by losses across the board, after local unemployment reached its highest level since 2008. In the overall emerging market sphere, the MSCI Emerging Market Index (0.07 percent) ticked slightly higher.
Brent crude oil
The Brent oil price traded lower yesterday, as traders assessed Sino-US trade developments. Meanwhile, US crude stocks fell 708,000 barrels in the week ended October 25 to 436 million. At the close of local trade, benchmark Brent crude futures quoted 0.08 percent lower at $61.30pb. Crude prices were trading above $61/pb during Asian trade.