File image: IOL
File image: IOL

WATCH: Rand runs out of momentum

By Compiled by Dhivana Rajgopaul Time of article published Feb 7, 2020

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JOHANNESBURG - The South African currency initially rode the tide of rebounding risk assets on the back of a China announcement, although the local unit surrendered some intraday gains as the session progressed. Risk assets cheered the Chinese ministry of finance’s announcement that China will cut tariffs on approximately $75bn of US goods to 5 percent from 10 percent beginning February 14 according to NKC Research.

On the domestic front, struggling parastatal Eskom announced that load-shedding will continue today with a high risk of rolling blackouts throughout the weekend. At the close of local trade, the rand quoted 0.89 percent weaker at R14.85/$, after trading in a range of R14.71/$ - R14.91/$. The rand extended losses overnight. Expected range today R14.80/$ - R15.00/$.

South African bourse

The JSE All Share (0.18 percent) ended higher yesterday, led by gains in large consumer goods (+0.90 percent) and industrial (+0.40 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.19 percent) traded higher.

Brent crude oil

The Brent oil price surrendered most of the previous session’s gains, with the oil market having recently spun into contango, indicating the market is oversupplied. Opec+ is expected to announce production cuts of 600,000 bpd. At the close of local trade, benchmark Brent crude futures quoted 2.92 percent lower at $54.83pb. Crude prices traded flat during Asian trade this morning.

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