CAPE TOWN – The rand opened slightly stronger on Monday after a strong overnight session but weakened in early trade ahead of President Cyril Ramaphosa’s question-and-answer session in Parliament.
Corporate treasury manager at Peregrine Treasury Solutions Bianca Botes said the decline by Standard Bank purchasing managers index indicated a contraction in the private sector but this number did little to push the rand off its course.
“Caution in terms of the US dollar is assisting emerging markets to make up lost ground, as the US braces for the mid-term elections today. Markets will be keeping a close eye on politics with the US elections as well as Europe,” said Botes.
At 5pm the domestic currency was bid 2c weaker than Monday’s same time bid at R14.20 a dollar. Against the pound the rand was, however, 3c softer at R18.57 and to the euro the currency was largely unchanged at R16.22.
TreasuryONE senior currency dealer Andre Botha said the rand suffered a bit of a post-non-farm payroll hangover yesterday morning as the US dollar edged stronger against the Euro.
“This early momentum was quickly arrested and we have seen the US dollar lose some ground against most currencies as the market is starting to position itself for the US mid-term election. The Rand took this weakening in the US dollar as a shot in the arm and closed the day down at R14.15 against the US dollar,” said Botha.
JSE stocks were also lower with the bluechip Top40 giving up 0.85 percent to 48 124.03 points while the broader all share index weakened by the same margin to 54 451.55 points.
BUSINESS REPORT ONLINE