Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
Yesterday, the Rand traded in a very narrow band for most of the day and looked odds on to break below the R14.3000 level, before a sudden turn for worse saw the Rand end the day as the worst-performing EM currency and ended the day firmly entrenched above the R14.4000 level. Reasons for the sudden weakness hs ranged from a reaction to the Brexit vote too low liquidity conditions and stop losses being triggered and bad data out of China. This uncertainty does not bode well for the Rand and we could see the Rand on the defensive as we head to the end of the week. This uncertainty has also spilt into equity markets as Asian Markets traded with mixed results this morning.
Yesterday, we saw the British Parliament voted against the “no-deal” scenario but this still leaves the UK between a rock and a hard place, as they either need to get a deal before the 29th of March or extend Article 50 in order to form a new proposal. This will inject some volatility in the market in the short term. Data is very scarce today thus the Rand will be at the mercy of events and sentiment from offshore and could be on the back foot.