A number of local and international factors are currently weighing on the rand and South African economy, says Bianca Botes, treasury partner at Peregrine Treasury Solutions.
Chief among these issues is the ongoing trade discussions between the US and China, she said.
“While the US and China are set to sign the phase one trade deal today, the US confirmed last night that all previously imposed tariffs will remain in place until the phase two deal is signed, eroding some of the upbeat sentiment.”
Looking locally, load shedding continues to dominate discussion in the country with the system expected to face increased pressure as more people return to work.
“While the lights have remained on in SA for the past few days, municipalities have been notified to adjust their load shedding plans to accommodate stage 8 (40% of load being shed), which is weighing on growth prospects for the country,” Botes said.
UK Consumer Price Index and Producer Price Index are due for release on Wednesday, while the EU will release industrial production and trade balance numbers. Local retail sales will be followed by US PPI numbers.
“The rand is edging weaker and a sustained break above R14.46/$ will open the door for the currency to move a leg weaker towards the next technical level of R14.63,” Botes said.
On Wednesday the rand was trading at the following levels against the major currencies:
- Dollar/Rand: R14.40 (-0.07%)
- Pound/Rand: R18.76 (0.03%)
- Euro/Rand: R16.03 (-0.01%)