Markets WRAP: Rand closes at R15.23/$

The rand closed at R15.23 to the greenback on Friday afternoon.

TreasuryONE said in a note earlier that EM currencies had recovered from their weaker levels.

"The rand gained some support from comments by the International Monetary Fund that SA does not need any funding for now despite high debt levels," it said.

An "uneasy calm" settled over the market in the last few trading sessions, says Andre Botha, Senior Dealer at TreasuryONE, with the Rand trading in a 15 cent band for most of yesterday after several days of major volatility. 

The Rand might push stronger should the momentum hold, he added. It has also gained some support from the IMF's comments that SA does not need any funding for now despite high debt levels. 

"There is a bit of two-way risk in the market with EM's currently looking like there could be a recovery but the biggest safe-haven currency Gold is also trading stronger this morning," said Botha. "Expect these two opposing forces to hold for the day, unless some news breaks from across the waters. This seems to suggest that we could see the Rand range-bound as we drift into the weekend."

The rand has weakened by more than 10% over the past two weeks and is considered to be oversold, Peregrine Treasury Solutions's Bianca Botes said in a note to clients this morning.

By 07:42, the rand was changing hands at R15.23 to the greenback.

"However, given the state of the global environment and the continuous sell-off of emerging market assets, don’t brace for a recovery just yet," she said. 

"Local fundamentals, slowing global growth and geopolitical tension mean a perfect storm.

"The rand remains in treacherous terrain, with a sovereign credit rating downgrade considered to be imminent.

"Recognising the negative signs, foreigners have sold a net R14.4bn SA bonds so far in August – equal to R1.8bn a day.

"We will be keeping a close eye on global and local data, as well as the geopolitical landscape that continues to set the tone for risk appetite. 

"The rand starts the day at R15.24/$, R16.95/€ and R18.46/£.The expected range for the upcoming week is fairly wide given the current volatility at R15.10 to R15.48."