Daily Market Commentary
South Africa’s rand firms, focus on Ramaphosa speech
South Africa’s rand strengthened against the dollar on Thursday, extending gains for the third straight session buoyed by strong risk sentiment, as traders awaited mining and manufacturing data and President Cyril Ramaphosa’s address later in the day.
At 0713 GMT, the rand ZAR=D3 traded at 14.7025 against the U.S. dollar, 0.39% firmer than its previous close. The currency had hit a five-week high of 14.6400 on Tuesday.
Investors will look to December mining and manufacturing figures for clues on the state of the economy at the end of last year, as well as Ramaphosa’s State of the Nation (SONA) address.
“While no surprises are expected, SONA will set the tone for the upcoming budget during a time local economic hardship,” said Bianca Botes, executive director at Peregrine Treasury Solutions in Pretoria.
Ramaphosa will make his speech at 1700 GMT against a backdrop of an ailing economy that was in recession before the COVID-19 pandemic hit and a stalled vaccination programme.
South Africa is scrambling to start inoculating its citizens after it paused the rollout of the vaccine developed by AstraZeneca and Oxford University following a small clinical trial that showed it offered minimal protection against mild to moderate illness from the 501Y.V2 variant dominant in the country. fixed income, the yield on the long-dated benchmark government bond due in 2030 ZAR2030= was up 1.5 basis points to 8.565 in early deals.
Source: Currency Assist