JOHANNESBURG — The rand was firmer late on Friday as the currency regained some composure after a long and volatile week.
The rand has been in a weakening trend since the Reserve Bank kept local rates on hold at 5,75% last week and after governor Gill Marcus’s said that she would not renew her contract when it expired.
At 3.53pm the rand was at R11,0329 against the greenback from a previous close of R11,0734. The euro was at $1,2843 from its previous close of $1,2916. Against the euro‚ the rand was at R14,1677 from its previous close of R14,3014 and was at R18,0130 against the pound from R18,1930 on Thursday.
“It has been a long and volatile week and the rand has come a long way. Although the dollar is quite strong against major currencies, the weakness in the rand on Thursday was a bit of an overreaction,” Bidvest Bank chief forex dealer Ion de Vleeshauwer said.
The rand had lost a lot of ground on Thursday, weakening to R11,10 to the dollar due to panic after Reserve Bank governor Gill Marcus said she was going to retire, he said.
“With this overreaction and the uncertainty about the Scots now out of the way, the dust has settled a bit and the market has calmed down a tad.
“The rand regained some composure today, but the currency is still not out of the woods. It is, however, off its worst levels,” he said.
Global investors were encouraged by Thursday’s decision by Scottish voters to remain part of the United Kingdom, which saw the British pound strengthen to a two-week high against the dollar and a two-year high against the euro.
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Meanwhile, After starting on a strong note‚ the Johannesburg Stock Exchange (JSE) closed lower as the market failed to follow a higher Dow, which rose on the Alibaba listing.
London’s FTSE 100 had a good day, with gains attributable to the “no” vote on Scotland’s independence.
The JSE was up 0,64% in early trade‚ mainly on industrials and banks‚ with the gains disappearing in the late afternoon despite good showings by developed markets internationally.
Most emerging markets, including Russia, pulled back. The Dow Jones industrial average had gained 0,27% by the JSE’s close as investors bought Alibaba shares in the largest United States initial public offering (IPO) to date. The FTSE was up 0,44% after the release of the result of the Scottish vote.
The JSE all share closed 0,16% lower at 51 462,42 points‚ with the blue-chip top 40 losing 0,14%. Banks were the only positive index‚ adding a marginal 0,09% with platinum down 0,56%. Resources lost 0,44% with gold shedding 0,15%. Financials relinquished 0,11% and industrials were 0,08% softer.
Vunani Private Clients analyst Viv Govender said the market drift after the strong opening was not that exaggerated. “We had some initial optimism on the Scottish vote‚ but thereafter the global market focus turned to the Alibaba IPO.”
The FTSE was up in a relief rally on the Scottish referendum‚ with rand hedges and resources on the JSE following suit.
— BD Live
