CAPE TOWN - It was a rather blue Monday for the rand as the currency was unable to start where it had left off on Friday, weakening to an intra-day low of R13.57.
There were several medium and high impact events this week, mainly out of the EU and US, to keep the volatility going, so another roller-coaster ride was likely, said James Paynter, director and head market analyst at Dynamic Outcomes.
“It appears there is still some underlying momentum to push the market higher, but based on the preferred Elliott wave count, it is unlikely to be one-way traffic. We will be looking for the market to show its hand over the next few days,” he said.
At 5pm, the rand bid 6cents weaker than Friday’s same time bid, at R13.50 to the dollar. Against the pound, the rand declined 9c to R17.70 and to the euro the currency softened 7c to R15.80.
The rand was likely to remain volatile for the rest of this year’s third quarter as it remained at risk from heavy portfolio outflows, with the local currency trading weaker yesterday afternoon, said Annabel Bishop, the chief economist at Investec.
“However, the fourth quarter is expected to show some currency strength, if not already in September, as seasonal effects - end of Northern hemisphere summer and a return of many market players from vacation - tend to result in some risk-on and emerging markets strength,” she said.
Meanwhile, JSE stocks also took a pounding with the blue chip Top40 index declining 0.83percent to 50481.32 points, while the broader all share index inched lower 0.76percent to 56556.81 points.
Leading losses among major movers were Steinhoff, which plunged 14.24percent to R2.77, followed by Mediclinic, which gave up 2.85percent to R90.66.
The JSE declined 2.77percent to R163.40, Dis-Chem dropped 2.67percent to R27.75 and MTN ended the day 2.46percent lower at R104.90.
Top gainers were Globe Trade Centre, which increased 7.46percent to R36, followed by Discovery, which rose 2.36percent to R162.
Old Mutual ticked up 2.13percent to R28.29, while Steinhoff Africa Retail added 2.11percent to R16.90 and Nepi Rockcastle gained 1.47percent to R118.02.