Zuma and Trump’s moves tickle the rand
Pericles Anetos | 2017-01-30 10:43:54.0
President Jacob Zuma. Photo file.
Image by: REUTERS/Rogan Ward
The rand was marginally weaker on Monday morning‚ continuing the volatility it experienced last week. The instability was triggered by rumours that President Jacob Zuma was planning a Cabinet reshuffle after his state of the nation address on February 9.
Sunday Times reported that Brian Molefe could be in line to be named finance minister.
Rand Merchant Bank’s chief currency strategist‚ John Cairns‚ said that the rand’s reaction to the speculation of a Cabinet reshuffle highlighted the extent of market concern about local politics.
However‚ he said that despite local politics‚ the dollar was still driving the rand.
The move by US President Donald Trump on Friday to sign an order shutting the borders to refugees and others from seven largely Muslim countries has indicated that Trump will act on the rhetoric he delivered during his campaign. Some of those promises include infrastructure spend and trade protectionism.
“Combined with Friday’s slightly weaker than expected US GDP print‚ the net effect should be rand positive with dollar weakness outweighing some of the minor risk-off [sentiment]‚” said Cairns.
The South African Revenue Service (SARS) is due to release monthly trade statistics for December in the afternoon. Private sector credit extension‚ SA’s trade balance and the purchasing managers index (PMI) data will dominate local economic data this week‚ while the US Federal Reserve holds its first meeting of the year.
At 9.13am the rand was at R13.5275 to the dollar from Friday’s R13.4918. It was at R14.4950 to the euro from R14.4800 and at R16.9956 to the pound from R16.9976.
The dollar was at $1.0715 to the euro from $1.0721.
– TMG Digital/BusinessLIVE