Rand steady as local political news takes centre stage

The rand held steady on Monday morning‚ but could be vulnerable to political news headlines as National Assembly speaker Baleka Mbete announces her decision on whether a motion of no confidence against President Jacob Zuma will be voted on via a secret ballot.

The decision is due in the afternoon.

Opposition parties are hoping a secret vote will allow disaffected ANC MPs to vote against Zuma‚ whose leadership has come under intense scrutiny since his unpopular Cabinet reshuffle in March.

At the time‚ Zuma fired the respected former finance minister Pravin Gordhan and his then deputy‚ Mcebisi Jonas‚ an exercise that led S&P Global Ratings and Fitch to downgrade SA’s credit ratings.

For all the political shocks‚ the rand has been relatively resilient so far in 2017‚ backed up in part by yield-seeking foreign investors.

“The decision might prove to be fruitless ahead of tomorrow’s vote‚ but it will be interesting to see how markets digest it‚ with a slight short-term reaction plausible‚” TreasuryOne dealer Gerard van der Westhuizen said.

Markets will also be waiting for a ratings decision on SA by Moody’s Investors Services‚ due on Friday.

The rand wobbled in the past two weeks‚ after Moody’s‚ which has the country’s rating just one notch above sub-investment grade‚ warned that SA’s lack of structural reforms could hinder economic growth potential.

The dollar held broadly steady on global markets‚ after a staging a mini rally on Friday following an upbeat jobs report.

Nonfarm payrolls rose by 209‚000 in July‚ compared with an expected 183‚000‚ and the unemployment rate fell to 4.3% from 4.4%.

At 9.03am on Monday‚ the rand was at R13.4185 to the dollar from R13.4183.

It was at R15.8104 to the euro from R15.8176 and at R17.5017 to the pound from R17.5197.

The euro was at $1.1782 from $1.1772.

– BusinessLIVE

 

 

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