South Africa Rand strengthened against dollar amid coronavirus pandemic

Theodora Aidoo Mar 18, 2020 at 10:00am

March 18, 2020 at 10:00 am | Money Moves, News

Theodora Aidoo

Theodora Aidoo | Staff Writer

March 18, 2020 at 10:00 am | Money Moves, News

Pic Credit: diggers.news

A day after the country’s currency, stocks and government bonds plunged over the coronavirus pandemic, South Africa‘s Rand strengthened against the Dollar in early trade on Tuesday.

Stocks also gained back some of the value lost on Monday which is the Johannesburg Stock Exchange’s (JSE) deepest daily drop on record.

Coronavirus cases in the country have shot up to 116, with 14 local transmissions, yet the Rand ZAR=D3 was up 0.56% at 16.6000 per dollar by 0617 GMT, having weakened 2.5% on Monday.

Global markets were ravaged as the U.S. Federal Reserve’s second emergency rate cut failed to quell worries about the virus’ mounting economic toll.

However, investors’ focus would be on South Africa’s central bank rates decision on Thursday as the rand claws back some lost ground.

According to a Reuters poll, the South African Reserve Bank is expected to cut interest rates, but the easing is likely to be less aggressive than other global central banks trying to mitigate damage from the coronavirus outbreak.

“If we look at the market, I think people are taking a pause for a moment. I think the market is exhausted and is just taking stock of where we are,” Andre Botha, currency dealer at Treasury One said.

Meanwhile, South African president Cyril Ramaphosa declared a national state of disaster on Sunday and announced a range of measures to contain the outbreak that has infected some people in the country.

The Rand is expected to trade in a range of 16.35 to 16.85 to the dollar, NKC African Economics say. In fixed income, the yield on the 10-year government bond ZAR2030= was down 9 basis points at 10.655%.

Investors are relying on and are looking for direction from data out of the United States and Europe as Finance ministers from the Eurozone meet to further discuss the turmoil faced by the region in light of the rapid spread of the virus according to Bianca Botes, treasury partner at Peregrine Treasury Solutions.

“It’s also a busy data day in the U.S. as we turn our attention to retail sales, production numbers as well as JOLTs (Job Openings and Labor Turnover Survey) job openings,” Botes said.

Most viewed

Conversations

Must Read