Rand weaker as global growth fears intensify

10 December 2018 - 15:42 By Karl Gernetzky
The rand was weaker against major global currencies on Monday afternoon.
The rand was weaker against major global currencies on Monday afternoon.
Image: Phill Magakoe / AFP

The rand was softer against major global currencies on Monday afternoon, with global risk assets, in general, coming under pressure.

Investors are waiting for a series of local economic data releases this week, while Tuesday could see a vote on the contentious draft Brexit deal, which could cause volatility for the pound.

At 2pm the rand was 0.45% weaker against the dollar at R14.236, 0.65% against the euro at R16.2496 and 0.18% against the pound at R18.0378. The euro was 0.2% weaker at $1.1415.

At the same time the bid on the benchmark R186 government 10-year note was at 9.14% from 9.03%.

Downbeat economic data releases out of Japan and China served as a reminder that a cloud continues to hover over global economic growth prospects.

Comments from a US official suggesting the White House would take a hard line against China should no trade agreement be reached by March next year also helped sour the mood on global markets.

The euro, which the rand often tracks, is also under strain as tax protests in France continue.

Europe’s second-largest economy was now likely to see a sharp downturn in activity as a result of the protests over the past few weeks, said BK Asset Management MD Boris Schlossberg. "That’s bad news for the continent as a whole, especially if the European Central Bank continues on its path to taper which could exacerbate the contraction in demand by tightening credit at the worst possible time."

- BusinessLIVE