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Rand recoups some of its earlier losses after taking a beating due to news of new Covid-19 variant

The rand saw notable volatility on Friday, with markets jittery following news of a new coronavirus variant being observed in the country, according to Oxford Economics Africa. Photographer: Nadine Hutton/Bloomberg

The rand saw notable volatility on Friday, with markets jittery following news of a new coronavirus variant being observed in the country, according to Oxford Economics Africa. Photographer: Nadine Hutton/Bloomberg

Published Nov 29, 2021

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The rand saw notable volatility on Friday, with markets jittery following news of a new coronavirus variant being observed in the country, according to Oxford Economics Africa.

The local unit teetered on R16.4/$ during early trade before recovering somewhat thereafter. This pressure was also reflected in South Africa’s capital markets in general, with the domestic stock market losing on the day while government yields rose. The news is a devastating blow to a country on the eve of its holiday season, with the list of countries banning flights from South Africa increasing by the day.

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At the close of local trade, the rand tumbled by 0.43 percent, ending at R16.22/$, after trading in the range of R15.95/$ - R16.36/$. The rand recouped some of its earlier losses overnight. The expected range of the rand against the dollar today is R16.00/$ - R16.30/$.

South African bourse

The JSE All Share (-2.75 percent) ended down on Friday in line with global markets as investors reacted to the announcement of a new Covid-19 variant (Omicron) detected in South Africa. Leisure, banks and life insurance stocks were the hardest hit as investors jumped out of risky assets. Absa (-8.91 percent) recorded the biggest drop out of the four big banks.

Brent crude oil

The Brent oil price crashed on Friday, with a new variant raising concerns that a supply surplus will materialise in the first quarter. The global market mood turned sour as investors feared that the new variant could dampen economic recovery leading to a decline in fuel demand. At the close of local trade, the Brent oil price plummeted by 4.53 percent to $76.6/pb. Crude prices traded higher during Asian trade this morning from its low of $73/pb Friday evening.

BUSINESS REPORT ONLINE

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