Rand comes under renewed pressure

The rand gave up more than a percent against the dollar in morning trade on Wednesday, amid fresh concerns over the impact of Britain’s departure from the European Union.

The rand traded at R14.89 against the dollar, having traded at below R14.50 earlier in the week, while it also surrendered some gains it made against the pound, and the euro – trading at R19.28 and R16.44 respectively.

Reuters noted that the All-Share index also continued its recent downward trend – trading 0.76% weaker to 51,374 points.

The media company noted that recent domestic data points to sluggish growth, leaving the country vulnerable to sovereign credit rating downgrades before year-end.

On Tuesday, a survey showed consumer confidence slipped further into negative territory in the second quarter of the year, signalling households’ concerns about the gloomy economic outlook.

A separate report showed the private sector slipped back into contraction in June as output fell and companies cut jobs.

Reuters added that like other emerging markets, South Africa was also victim on Wednesday to renewed fears over instability in the European Union – triggering risk aversion.

“Morning markets appear to remain cautious … Brexit risks currently dominate,” analysts at Nedbank said in a note, adding that minutes of the most recent US Federal Reserve meeting, due out later on Wednesday, would give the market further steer.

More on the rand and Brexit

Rand pounded as Britain votes to leave the European Union

Rand below R14.50 vs the dollar ahead of Brexit vote

Rand stronger as ratings firms give SA room to breathe

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