File image: IOL
File image: IOL

WATCH: Rand trades weaker overnight

By Compiled by Dhivana Rajgopaul Time of article published Feb 24, 2020

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JOHANNESBURG - Despite managing a slight gain on Friday, the rand remained on the back foot to cap off a difficult week, while traders jockey for positions ahead of the all-important budget delivery this week according to NKC Research.

Market watchers await Wednesday’s budget with abated breath, hopes pinned on a modicum of clarity on the embattled parastatals and dire debt situation. We anticipate that the budget outcome end-February will not be enough to avoid a Moody’s downgrade, which will include a heavier tax burden to further stifle private consumption growth, and hence will be the last nail in the coffin to force a downgrade action to junk status. Moody’s decision to slash the growth outlook for 2020-21 raised red flags ahead of the rating agency’s pivotal March rating action schedule. At the close of local trade, the rand quoted 0.15 percent stronger at R15.08/$. The rand traded weaker overnight. Expected range today R14.90/$ - R15.15/$.

South African bourse

The JSE All Share (-0.79 percent) followed global stocks lower on Friday due to new coronavirus fears. In local news, AngloGold Ashanti (+6.56 percent) reported a 72 percent rise in annual earnings for the period ended December 2019 – thanks to rising gold prices and strong performance from its Kibali operations in the DRC. In the overall emerging market sphere, the MSCI Emerging Market Index (-1.01 percent) fell.

Brent crude oil

The Brent oil price retreated from its highest level in February as new coronavirus cases continue to rise in China, while major oil producers seem to be in no rush to curb production. At the close of local trade, benchmark Brent crude futures quoted 1.06 percent lower at $58.07pb. Crude prices traded lower during Asian trade this morning. 

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