Rand slightly weaker to the pound as market eyes possible May exit
The rand was stable against the dollar and euro on Wednesday afternoon but a little softer against the pound as markets eyed a forthcoming vote of no confidence in UK Prime Minster Theresa May.
The pound is holding up relatively well ahead of the vote, taking place in the evening, according to Oanda analyst Craig Erlam. "A defeat for May could see this temporary support break in spectacular fashion as the prospect of a no-deal Brexit rises," he said.
At 2.03pm, the rand was 0.28% firmer against the dollar at R14.2904 and 0.15% against the euro at R16.16944. It was 0.24% weaker against the pound at R17.9339. The euro was 0.12% stronger at $1.1332.
At the same time, the bid on the benchmark R186 government bond was at 9.18% from 9.155%.
Earlier, the rand found some support after confirmation the Chinese had agreed to resume soybean imports, and drop tariffs on vehicles from the US.
Local data, however, was slightly downbeat, with consumer inflation climbing to 5.2% in November, slightly ahead of the Trading Economics consensus forecast of 5.1%.
Retail sales data, on the other hand, was positive, growing 2.2% year-on-year in November, ahead of a forecast of 1.8%.
The retail sales figures indicate a robust start to the fourth quarter of the year, but the inflation figures point to another interest-rate increase in the first quarter of 2019, said Capital Economics senior emerging-markets economist John Ashbourne.