The rand rallied to its best level against the dollar in about three weeks on Wednesday morning just hours before Finance Minister Pravin Gordhan will table the medium-term budget policy statement‚ which analysts say has the potential to stave off a ratings downgrade.
“We expect today’s budget will be rand supportive. Look for only mild fiscal slippage‚ an impressive performance given the weakness in the economy‚” Rand Merchant Bank currency strategist John Cairns said.
“With local elections out of the way‚ the budget has no populist tones to strike but the National Treasury will need to tightly hold on to the expenditure ceiling and allude to progress on reforms given the political uncertainty and rating pressure.”
The rand has steadily regained a lot ground since plumbing lows of R14.50 to the dollar about two weeks ago when the National Prosecuting Authority (NPA) brought fraud charges against Gordhan‚ who has dismissed them as politically motivated.
Standard Bank trader Oliver Alwar said the charges against Gordhan posed a major risk to the rand and other local assets.
At 9am‚ the rand was at R13.7042 to the dollar from Tuesday’s R13.7651. It was at R14.9448 to the euro from R14.9866 and R16.6824 to the pound from R16.7804.
The euro was at $1.0907‚ from $1.0888 in the previous session.
Rand at three-week highs as the focus falls on Gordhan’s speech
The rand rallied to its best level against the dollar in about three weeks on Wednesday morning just hours before Finance Minister Pravin Gordhan will table the medium-term budget policy statement‚ which analysts say has the potential to stave off a ratings downgrade.
“We expect today’s budget will be rand supportive. Look for only mild fiscal slippage‚ an impressive performance given the weakness in the economy‚” Rand Merchant Bank currency strategist John Cairns said.
“With local elections out of the way‚ the budget has no populist tones to strike but the National Treasury will need to tightly hold on to the expenditure ceiling and allude to progress on reforms given the political uncertainty and rating pressure.”
The rand has steadily regained a lot ground since plumbing lows of R14.50 to the dollar about two weeks ago when the National Prosecuting Authority (NPA) brought fraud charges against Gordhan‚ who has dismissed them as politically motivated.
Standard Bank trader Oliver Alwar said the charges against Gordhan posed a major risk to the rand and other local assets.
At 9am‚ the rand was at R13.7042 to the dollar from Tuesday’s R13.7651. It was at R14.9448 to the euro from R14.9866 and R16.6824 to the pound from R16.7804.
The euro was at $1.0907‚ from $1.0888 in the previous session.
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