Picture: GALLO IMAGES/FOTO24/LOANNA HOFFMAN
Picture: GALLO IMAGES/FOTO24/LOANNA HOFFMAN

THE rand was marginally firmer against the dollar at midday on Monday, recouping some of its losses due to the risk associated with conflict within the ruling African National Congress (ANC).

The rand weakened by 20c to R16.20 to the dollar on Friday afternoon after media reports that Finance Minister Pravin Gordhan might resign.

At 11.42am the rand was at R16.0988 against the dollar from R16.1113 previously.

Against the euro, the rand was at R17.5844 from R17.6239 previously. It was at R22.3290 against the pound from R22.4002 previously.

The euro was at $1.0922 from $1.0914 previously.

However, Barclays Research analysts said the rand was likely to remain under pressure this week.

At the weekend President Jacob Zuma reiterated the government’s support for Mr Gordhan. However, but the rand struggled to recoup Friday’s lost ground on Monday morning amid the disappointment that the Group of 20 (G-20) meeting failed to allay concern about global growth, the analysts said.

Barclays said the rand would struggle to recover this week if some of Monday’s bond coupon payment owed to foreigners was not reinvested and if the South African Revenue Service’s (SARS’s) announcement on Tuesday showed a substantially widened trade deficit.

The rand would also struggle if Wednesday’s local gross domestic product (GDP) data proved especially subdued and Friday’s US employment report revived the expectation of more US rate increases, the analysts said.

On the international front, the yen rose sharply against the dollar.

Chinese purchasing manager surveys due on Tuesday also provided the market with something to be nervous about and both Chinese stocks and the yuan were lower as European markets came on line.

China has now allowed the yuan to weaken almost 1% against the dollar from highs hit when markets returned from the Lunar New Year holiday two weeks ago.

Suggestions that Switzerland could lower the rate at which big institutional depositors pay for holding Swiss francs resulted in the franc weakening against the euro.

Sterling, battered by "Brexit" referendum concerns last week, was trading back below $1.39 after some overnight gains.

The yen, traditionally investors’ safe haven of choice in times of global economic tension, gained just under 1% to ¥113.05 to the dollar and ¥123.47 to the euro.

With Reuters