JOHANNESBURG - The rand slipped close to a two-month low against the greenback during yesterday’s European session according to NKC Research.
The local unit struggled to gain momentum as a statement by Moody’s earlier in the week spurred fears of a rating downgrade to cap a volatile week punctuated by the People’s Bank of China’s (PBoC) decision to allow a breach of the totemic CNY7/$ threshold. At this stage, our baseline expectation is for Moody’s to announce a credit outlook downgrade from stable to negative on November 1, although we do not expect a decision to cut South Africa to junk status – a move which will spur massive portfolio outflows. At the close of local trade, the rand quoted 1 percent weaker at R15.08/$, after trading in range of R14.83/$ - R15.12/$. The rand improved overnight. Expected range today R14.90/$ - R15.20/$.
South African bourse
The JSE All Share (+0.3 percent) ended higher yesterday. The weaker rand weighed on large financial (-0.9 percent) stocks but mining (+4.4 percent) shares shone on the back of firmer precious metals prices. In the overall emerging market sphere, the MSCI Emerging Market Index traded little changed.
Brent crude oil