THE rand was firmer on Friday morning after President Jacob Zuma’s state of the nation address was concluded relatively peacefully‚ despite scuffles as EFF members were evicted from Parliament building.
In his delayed address‚ Zuma said economic transformation would be a priority in 2017‚ giving little detail in his effective last year as president of the ANC.
News that US President Donald Trump would announce an ambitious tax reform plan in the coming weeks lifted global currency markets. Trump said his announcement would be “phenomenal in terms of tax” and would come within the next three weeks. He billed his tax reform plan as the most ambitious since the Reagan era.
Standard Bank’s executive head of foreign exchange spot trading‚ Warrick Butler‚ said the rand remained within the confines of its recent range during Zuma’s address on Thursday. He said this was because no Cabinet reshuffles were announced. “Other than a bit embarrassing‚ due to our politicians acting like kids in a school ground‚ the Sona speech in Parliament was a complete non-event‚” Butler said.
Nedbank Corporate and Investment Banking (CIB) analysts said Zuma’s speech had shed little new light in terms of revolutionary new policy in SA‚ instead it clarified the progress of the nine-point plan highlighted last year as well as re-emphasising some of the key policy mantras and rhetoric of the ruling party. The analysts said the “more ‘leftist’ slant to the ruling party’s rhetoric was line with expectations as efforts are made to assuage the voters lost to emergent parties such as the EFF“.
Butler said market focus would shift to the 2017 budget speech now that Sona was over. “This will be key for rating agencies who gave the Finance Department‚ as well as key government decision makers‚ the benefit of the doubt in December‚ some time to enact the structural and fiscal changes in order to avert a downgrade by the end of this year.”
At 9.16am‚ the rand was at R13.3632 against the dollar from R13.3860.
It was at R14.2470 against the euro from R14.2737 and at R16.7149 against the British pound from R16.7402.
The euro was at $1.0661 from $1.0656. – search regex/BusinessLIVE