After firming all week, rand slightly weaker in wake of SONA

After firming 3% against the dollar during the week, the rand was trading slightly weaker on Friday morning in the wake of President Cyril Ramaphosa's State of the Nation address.

The local currency opened trade at R14.33 to the greenback and was changing hands at R14.38 at 08:30, down 0.3%.

"All events favoured the local unit this week, ranging from a dovish US Federal Reserve to clear optimism from ratings agency Moody’s with regards to the outlook of the local economy," said Bianca Botes of Peregrine Treasury Solutions in a note to clients. 

Botes said that on the international front, the key data event for the week was the Federal Reserve interest rate announcement on Wednesday.

"While the Federal Reserve did not cut interest rates this time around, the dovish stance by the Fed was certainty reiterated, implying that a rate cut by as much as 50bps could be on the cards towards the end of the year."

Botes said that while the tone of Ramaphosa's address on Thursday evening was upbeat, it "left many South Africans with perhaps even more questions than before the address".

"The country remains in the dark as to what exactly the turnaround plan for the economy will entail." 

NKC African Economics, in a morning note to clients, described Ramaphosa's address as competent. 

"Expectations had been so high – perhaps too high – that he would add some spark to his new dawn. Given the political and factional tightrope he must walk, the financial and economic constraints, the shattered country he inherited less than two years ago and a deep hunger among South Africans of all hues for hope and belief that change was imminent, his speech last night was competent, solid and often masterful but still felt a little like the president lacked conviction," it said. 

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