File Image: IOL
File Image: IOL

WATCH: Rand slumps to 5 month low, dragged down by domestic political concerns

By Compiled by Dhovana Rajgopaul Time of article published May 30, 2019

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JOHANNESBURG - The rand slumped to a 5-month low during the early European session, dragged down by domestic political concerns and risk-off sentiment as US-Sino trade talk progress deteriorated according to NKC Research. 

Negative momentum was dragged into early European trade as Tuesday’s swearing in of deputy president David Mabuza cast a cloud of concern over whether the ruling ANC will be able to deliver on promises of clean governance as the deadline for the appointment of Cabinet was fast approaching. Meanwhile, US-Sino trade tensions escalated, feeding into risk-off sentiment. At the close of local trade, the rand quoted 2.7 percent weaker at R14.76/$, after trading in range of R14.71/$ - R14.78/$. The rand clawed back losses overnight. Expected range today R14.45/$ - R14.75/$.

South African bourse

The JSE All Share (+1.0 percent) ended higher yesterday, thanks to gains in large technology (+4.0 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.3 percent) traded lower. In local news, Pepkor (-2.2 percent) reported 7 percent growth in revenue (to R35.3bn) for the six months ended 31 March 2019, which came in below market expectations.

Brent crude oil

The Brent oil price fell sharply at the beginning of yesterday’s session, as fears of an escalation in the Sino-US trade war weighed on oil demand. Crude managed to claw back some losses later in the session. At the close of local trade, benchmark Brent crude futures quoted 1.7 percent lower at $68.43pb. Crude prices recovered during Asian trade this morning.

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