The rand was softer in about the R12/$ area shortly before midday on Monday‚ but had recovered from its worst intraday levels as local and global political factors continued to weigh on market sentiment.
The prospect of a global trade war due to the US imposition of tariffs on steel and aluminium products continues to hover over the market. There is expectation that the tariffs could be signed into law this week‚ while EU officials will be meeting to discuss a formal response.
Italian elections on Sunday also soured the mood on global markets‚ after populist anti-EU parties won the most votes‚ but the lack of a clear parliamentary majority has pointed to possible instability for Europe’s third-largest economy.
“The EU would have a new headache to deal with if Italy formed a eurosceptic coalition‚ which would undoubtedly challenge EU budget rules‚” FXTM chief market strategist Hussein Sayed said.
Locally‚ continued political debate on the issue of expropriation of land without compensation is also expected to keep pressure on the rand‚ analysts said.
The week will also see a European Central Bank monetary policy decision‚ to be announced on Thursday‚ and the release of US non-farm payrolls on Friday. Locally‚ Statistics SA’s GDP data for 2017 is due on Tuesday.
Potentially‚ US president Donald Trump will steal the show as his words will be louder than the data‚ Rand Merchant Bank analyst Isaah Mhlanga said.
At 11:30am‚ the rand was at R11.9552 to the dollar from R11.9387‚ R14.7323 to the euro from R14.7302 and at R16.4879 to the pound from R16.4782.
The euro was at $1.2323 from $1.2337.
by Karl Gernetzky – BusinessLIVE
