Rand loses ground against dollar, markets await budget
Markets are looking ahead to Wednesday’s budget speech where the Treasury is expected to spell out 'tough decisions' to plug a revenue gap and narrow the deficit.
JOHANNESBURG - The rand slipped in early trade on Tuesday against the dollar, which edged further away off three-year lows reached on Friday.
At 0635 GMT, the rand traded at R11.72/dollar, 0.35% softer from its New York close on Monday but within striking distance of its three-year high of R11.56/dollar reached last week after the resignation of former President Jacob Zuma, whose administration was marred by missteps and scandal.
Technically, momentum indicators tracked by analysts suggest the rand’s short-term scope for gains is limited.
NKC African Economics says in a morning note that the rand’s range on the day is expected to be R11.60-11/85/dollar.
Markets are looking ahead to Wednesday’s budget speech where the Treasury is expected to spell out “tough decisions” to plug a revenue gap and narrow the deficit, providing an early look at how new President Cyril Ramaphosa plans to repair the ailing economy.
Stocks were set for a soft opening at 0700 GMT, with the JSE securities exchange’s Top-40 futures index 0.10% lower.
Government bonds weaker with the yield on the benchmark instrument due in 2026 up 4 basis points to 8.13%.