The rand took strain on Tuesday morning‚ demonstrating its vulnerability to shifts in global sentiment.
The local currency fell victim to renewed perceptions that interest rates in the developed economics could soon be rising — a scenario that is likely to drain capital from emerging markets.
Benchmark government bond yields in the US‚ Germany and the UK were on the rise again‚ signalling the changing expectation of monetary policy in these countries.
Markets will keep a close watch on the release of Eskom’s long-awaited financial results.
“The results will give us a sense of how bad the liquidity crisis is at the power utility and the extent to which the Treasury has to repair its balance sheet. There are a lot demands on the fiscus at the moment‚” ETM Analytics analyst Halen Bothma said.
Government finances are stretched to the limit‚ with the budget deficit projected to be R50.8bn in the 2017-18 financial year.
Markets also await details on how the government plans to fund fee-free higher education for poor households when Finance Minister Malusi Gigaba delivers the budget speech in February.
The budget will shape Moody’s Investors Services’ rating review on the country‚ which the agency is scheduled to release shortly after the budget.
At 9.30am‚ the rand was at R11.9888 to the dollar from R11.9401‚ at R14.8247 to the euro from R14.7832 and at R16.8160 to the pound from R16.8050
The euro was at $1.2365 from $1.2382
by Andries Mahlangu -BusinessLIVE
