Photo: IOL
Photo: IOL

WATCH: Rand trades on the back foot

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

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JOHANNESBURG - The local unit battled opposing forces as improving risk sentiment faced off against a grim business activity outlook according to NKC Research. 

Data released this week provided more clarity of the economic cost of the strict lockdown, with investors heeding a warning issued on Monday by the director-general of the National Treasury that the economy may contract by a mammoth 12% this year. According to revenue agency Sars, over 20000 people were retrenched in April. On a more positive note, Mining firms started operations this week as lockdown eased from stage 5 to stage 4 on May 1. At the close of local trade, the rand quoted 1.77 percent weaker at R18.75/$, after trading in range of R18.35/$ - R18.78/$. The rand whipsawed yesterday evening before re-gaining traction this morning. Expected range today R18.45/$ - R18.90/$..

South African bourse

The JSE All Share (+1.32 percent) ended in positive territory yesterday, on the back of gains in large resources (+3.22 percent) and industrial (+1.31 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.33 percent) traded higher.

Brent crude oil

Brent oil price surrendered previous session gains yesterday, after the American Petroleum Institute said that US inventories increased by 8.4 million barrels last week, exceeding market estimates. At the close of local trade, benchmark Brent crude futures quoted 3.55 percent weaker at $29.59pb. Crude prices traded steady during Asian trade this morning. 

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