CAPE TOWN – The rand gained some impetus in afternoon trade on Wednesday after the dollar came under pressure as the Democrats won the House of Representatives for the first time in eight years.
The focus, according to analysts, now shifts towards the US interest rate announcement on Thursday, but a hawkish US Federal Reserve is expected.
Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, told Business Report that the mid-term elections clearly indicated the US dissatisfaction with leadership under Donald Trump.
“This is, once again, an indication of how politics trumps economics in the current landscape. Policy uncertainty will now be top of the agenda for investors as the Democrats will move to challenge the Republicans on what they deem as numerous unconstitutional policies,” said Botes.
She said Eskom’s newly accepted board was also adding to the positive momentum of the rand which broke below R14 to trade at R13.95 in the afternoon session.