Rand stands its ground as Stats SA announces rise in SA unemployment
DURBAN – The rand traded slightly stronger than the dollar on Tuesday but weaker than the pound and euro as Statistics South Africa announced that the South African unemployment rate climbed to more than 30 percent.
The domestic currency ranged between R17.19 - R17.49 to the dollar.
At 5pm the rand was bid 10c stronger than the same time bid on Monday at R17.24 against the dollar. Against the pound,it was 3c weaker at R21.61 and bid at R19.54 versus the euro.
FXTM senior research analyst Lukman Otunuga said that given how the emergency budget had little fiscal space to manoeuvre, Finance Minister Tito Mboweni was walking on the tightest of ropes.
“Whatever the outcome of the speech tomorrow, it will certainly have an impact on the South African Rand which has slightly gained against the Dollar today. Can the rand return to its former glory? Well, this will depend on South Africa’s economic outlook and global risk sentiment,” said Otunuga.
He added the rand had depreciated against every G10 currency year-to-date, shedding almost 25 percent against the dollar. Otunuga said lower interest rates had narrowed the rand’s interest rate differential against other currencies while poor economic fundamentals continued to weaken appetite towards the currency.
“Where the rand concludes this week will be influenced by tomorrow's speech,” he said.
Nedbank CIB research analyst Reezwana Sumad said the rand, along with its emerging-market peers, remained at the mercy of global headlines.
“The price activity in the Far East this morning is purportedly attributable to US-China trade-related headlines that were subsequently denied. The rand markets are likely to remain cautious ahead of the local budget update tomorrow,” said Sumad.
Meanwhile, JSE stocks rose with the blue-chip Top40 index lifting 2.64 percent to 51,193.19 points while the broader all share index also increased 2.30 percent to 55,474.93 points.
The biggest earners were AngloPlatinum which gained 9.36 percent at R1 264.65 followed by DRDGold with 7.97 percent at R24.94 then Northam with 7.96 percent to R117.35. Royal Bafokeng Platinum increased by 6.64 percent at R36 while AngloGold lifted 6.34 percent to R499.32.
The biggest losers were Redefine which shed 7.52 percent to R2.83 followed by Ninety One Plc dropping 3.23 percent to R44.60 while Santam decreased by 3.23 percent to R280. Growthpoint lost 3.02 percent at R14.14 and Capco lost 2.61 percent to R34.71.