All eyes are on yet another Brexit vote in the UK – with uncertainty around the matter causing investors to be very cautious with their money.
The rand is once again on the back foot following an impressive retracement seen this week, as the markets remain extremely sensitive to anything that threatens stability and certainty.
According to Bianca Botes, Corporate Treasury Manager at Peregrine Treasury Solutions, the focus is now on Brexit, as the EU deal once again was voted down in parliament, with many expecting UK Prime Minister Teresa May to request an extension on the exit date.
“CPI in the US rose marginally, while today will see the release of US durable goods orders and PPI. The EU is also set to release industrial production figures,” Botes said.
“All eyes will remain on the next Brexit vote tonight – on the ‘no-deal’ Brexit – with a further vote on a possible extension scheduled for tomorrow, in the case of a rejection.”
The rand rallied to a three-day high of R14.23 to the dollar on Tuesday, before retreating after British lawmakers again rejected a deal to quit the EU.
The rand opened at R14.38 to the dollar on Wednesday and is expected to trade on a range of R14.27 to R14.50 today.
Here is how the rand is performing against major currencies:
- Dollar/Rand: R14.34 (+0.20%)
- Pound/Rand: R18.86 (-0.38%)
- Euro/Rand: R16.20 (+0.13%)