Rand plunges in early trade amid Cabinet uncertainty, trade war worries

accreditation

The rand, which fell by 2% against the dollar on Tuesday, fell by another 1% against the greenback in early trade on Wednesday, as questions around President Cyril Ramaphosa's Cabinet and global trade war concerns continued to caused what an analyst described as a "tornado" of risks. 

The local currency opened the day at R14.73/$ and was trading at R14.88/$ at 10:30, down 1% on the day. 

South Africans are still waiting for President Cyril Ramaphosa to announce his Cabinet, which may take place as soon as Wednesday. 

ANC deputy president David Mabuza was sworn in as an MP on Tuesday, paving the way for his possible reappointment as the country's deputy president.  

Lukman Otunuga, a research analyst at FXTM, said in a note to clients that the local currency was facing a "tornado of different risks".

"The rand does not like the headlines that David Mabuza is in the running to become deputy president," said Otunuga. 

"It is shaping up to be yet another rough, rocky and unpredictable trading week for financial markets as investors tussle with a number of different themes. Ongoing US-China trade developments, Brexit uncertainty and the return of drama over the Italian state budget are just some of the themes concerning investors," he said.  

In a morning note to clients TreasuryONE said the rand would remain on the back foot in Wednesday and could fall below the R15/$ level. The last time the rand ended a day's trade at below R15 to the greenback was in September 2018. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
13.77
+0.0%
Rand - Pound
19.42
-0.1%
Rand - Euro
16.69
+0.1%
Rand - Aus dollar
10.61
-0.2%
Rand - Yen
0.13
-0.0%
Gold
1,856.52
-0.1%
Silver
27.76
+0.3%
Palladium
2,827.50
+2.5%
Platinum
1,147.50
-0.7%
Brent Crude
73.99
+1.6%
Top 40
61,062
0.0%
All Share
67,311
0.0%
Resource 10
64,119
0.0%
Industrial 25
88,248
0.0%
Financial 15
13,596
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Have you noticed a difference in the voices of women compared to men in virtual meetings?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, there is a difference.
29% - 81 votes
No, I haven't noticed it.
62% - 173 votes
A bad internet connection worsens it.
10% - 27 votes
Vote