Rand whipsaws as Moody’s expresses concerns over SA’s post Covid-19 economic recovery, Newsline

Compiled by Dhivana Rajgopaul

JOHANNESBURG – The rand whipsawed throughout yesterday’s session, as Moody’s expressed concerns over South Africa’s post coronavirus economic recovery according to NKC Research.

However, the rand did benefit somewhat from a return to risk-on mode, which accelerated following the open of trading in London and Europe, buoyed by strong industrial growth figures out of China. Meanwhile, global optimism was lifted by hopes that US House Speaker Pelosi’s new fiscal stimulus offer to the White House may spur a new deal before the election. With the US elections presenting a salient risk to the risk-sensitive rand, we believe that markets are pricing in greater volatility around the US presidential election as a surge in mail-in votes raises the odds of a delay in declaring the new president.

At the close of local trade, the rand quoted 0.43 percent weaker at R17.14/$, after trading in range of R16.99/$ – R17.21/$. The rand traded steady overnight. Expected range today R16.90/$ – R17.20/$.

South African bourse

The JSE All Share (+2.11 percent) ended higher yesterday led by gains in large financial (+5.65 percent) firms. Absa shares were up by 6.83 percent, Standard Bank stock rose 6.42 percent and Capitec posted a 6.21 percent gain. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.02 percent) traded higher.

Brent crude oil

The Brent oil price advanced in a choppy trading session yesterday helped along by a softer dollar and rising stock markets, while a resurgence in global Covid-19 cases kept gains to a minimum. At the close of local trade, benchmark Brent crude futures quoted 0.55 percent higher at $41.87pb. Crude prices dipped slightly during Asian trade this morning.

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