The rand was weaker on Wednesday, on track for a third consecutive day of losses, with investors watching out for new developments in the local political scene as a cabinet announcement has yet to be made.
The market is awaiting guidance by President Cyril Ramaphosa, as discussions about a government of national unity (GNU) continue. The ANC has suggested that the president is nearing an announcement on the composition of his new cabinet.
Investors are closely monitoring the situation, as the president's cabinet choices could have significant implications for the country’s economic trajectory.
“The uncertainty surrounding the GNU weighs on the currency as investors scour for signs of developments in the ongoing negotiations regarding the composition of the cabinet,” RMB analysts said.
At 10.35am, the rand had weakened 0.25% to R18.2564/$, 0.16% to R19.5228/€ and 0.22% to R23.1392/£. The euro was 0.15% weaker at $1.0693.
US Federal Reserve governor Michelle Bowman warned of upside risks to inflation on Tuesday, and the need to keep policy rates elevated for longer. Her comments align with hawkish remarks by several Fed officials.
Markets await fresh inflation data on Friday with the release of May’s personal consumption expenditures price (PCE) index. The PCE is the Fed’s preferred inflation gauge, and will provide further clarity on the inflation position in the US.
At 10.40am, the JSE all share had risen 0.57% to 80.020,42 points and the top 40 was up 0.65%.
At the same time in Europe, the FTSE 100 was up 0.58%, France’s CAC 40 0.4% and Germany’s DAX 0.86%.
Earlier in Asia, the Shanghai Composite gained 0.76% and Japan’s Nikkei 1.26%, while Hong Kong’s Hang Seng was little changed.
In the commodities market, gold lost 0.16% to $2,316.46/oz, while platinum gained 1.03% to $998/oz. Brent crude was 0.38% firmer at $85.33 a barrel.
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