Rand gains as global risk appetite improves
The rand strengthened on Monday morning‚ coinciding with an improvement in global risk appetite and a retreat in the dollar.
Investors filed back into risky assets‚ including equities‚ which helped the rand to rally further below the symbolic R12/$ handle.
The rebound in global shares followed days of heavy selling‚ which thrust some them into correction territory.
Local politics was also in the mix‚ with markets waiting to see if President Jacob Zuma will step down by the end of the day. The ANC’s national executive committee (NEC) will meet in the afternoon to discuss Zuma’s fate.
Zuma’s departure will enable his deputy‚ Cyril Ramaphosa‚ to take over the reins until 2019 when general elections will be held.
"Whether it will be a resignation by the president himself or the NEC recalling him remains to be seen. This will be a key factor for the week as markets expect the rand to test R11/$ if the matter is resolved and Zuma’s reign ends‚" said TreasuryOne dealer Gerard van der Westhuizen.
Zuma’s tenure has been marred by controversy‚ which cost the party at least three big metros during the 2016 municipal elections.
The other missteps include the sacking of a well-respected former finance minister Pravin Gordhan nearly a year ago in a Cabinet reshuffle‚ which led to the downgrade in the country’s debt rating.
At 9.25am‚ the rand was at R11.9331 to the dollar from R12.0311‚ at R14.6637 to the euro from R14.7358‚ and at R16.5283 to the pound from R16.6159
The euro was at $1.2289 from $1.2250.