The rand slipped on Friday morning‚ near the end of another volatile week
ALTHOUGH the local currency has weakened slightly‚ it appears to be on course to end four consecutive weeks of losses to the dollar‚ taking its cue from global markets.
“The easing of global risk aversion has allowed the rand to finally unwind the local-politics-induced losses of last week‚” Rand Merchant Bank currency strategist John Cairns said in an e-mailed note.
But question marks hang over the short-term direction of the rand‚ given that Moody’s and S&P Global Ratings are scheduled to announce the results of their reviews on SA’s debt rating next week.
SA could lose its coveted local-currency debt rating — an outcome that has knock-on effects on the already struggling economy. But the contrasting view is that markets could have priced in the probable outcome.
The dollar‚ meanwhile‚ was limping despite some progress on US tax reforms‚ which stand to be US President Donald Trump’s first major legislative win since he took office in January.
The US House of Representatives approved the tax reforms‚ which aim to cut corporate taxes from 35% to 20%‚ among other things.
At 9.26am‚ the rand was at R14.2045 to the dollar from R14.1620‚ at R16.7605 to the euro from R16.6683‚ and at R18.8128 to the pound from R18.6844
The euro was at $1.1798 from $1.1768.