If we don’t get an interest rate cut this year, blame the rand
Local currency ended Wednesday on its longest losing streak in five months, some 9% off its best level in 2019
The rand fell for the fifth consecutive session on Wednesday, its longest losing streak in more than five months, as global investors shied away from riskier assets amid concerns over slowing global growth.
The weakening rand was further decreasing chances of an interest rate cut in coming months, which would have provided an economic boost, said Wayne McCurrie of FNB Wealth & Investments. It was worth noting that fair value for the rand remained well below R14/$, he said.
As the JSE closed the rand was 1.02% weaker at R14.40/$, having lost 9% since its 2019 best of R13.23/$ on January 31. It was 0.75% weaker at R16.12/€ and 1.18% softer at R18.65/£.
The JSE weakened sharply and banks had their worst day in six weeks as local equities brushed off positive US corporate earnings reports that propelled the Dow to a near record high on Tuesday. McCurrie said despite positive US markets, equities were recovering from sharp losses at the end of 2018.“All they have done is taken back what they have lost. So far there no is major impetus for a bull market overseas,” McCurrie said. The JSE remains up 11.84% so far this year.