Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
We are only a day away from the long-awaited national election with the Rand as expected staying within a tight range with the R14.50 handle looking at offering resistance and the top side and below R14.40 looking tough to break at the moment. We expect the fallout from the election to take a short amount of time to happen as the election results will be known over the weekend.
For the most part, we expect the Rand to stay within tight ranges with headline risk still in evidence on the local front. On the international front, the Trump tweet rally subsided a little with the US dollar losing a bit of ground from yesterday and equity markets returning to normal after the sharp sell-off we saw yesterday.
For the Rand, at the moment we are looking at pressures from two sides with the upcoming election and the US-China trade spat, which is turning into a soap opera at the moment, with China officials meeting with their US counterparts on Thursday despite the threat of tariffs that will be imposed on Friday. The currency uncertainty strengthens our view at least in the short term that the Rand could trade sideways heading into the elections.