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South Africa’s rand slips ahead of rates decision, ratings reviews

South Africa’s rand slips ahead of rates decision, ratings reviews

2020-11-19

 

 

South Africa’s rand weakened early on Thursday, extending a recent retreat to a third straight session as global demand for risk currencies wavered and investors looked ahead to local lending rates decision.

At 0700 GMT the rand ZAR=D3 was 0.5% weaker at 15.5350 per dollar, it softest level since Friday, and a touch above the 15.50 technical level that could trigger more selling.

Poor local economic data, with retail sales data for September recording another monthly contraction, and a return for demand for safe-haven currencies like the dollar in recent sessions, ended the rand’s run to an eight-month high as risk clouds gathered. this afternoon’s rates decision, where the Reserve Bank is expected to keep rates steady at 3.5%, come credit ratings reviews by Moody’s and S&P on Friday.

Both firms already rate the country’s debt at subinvestment, but S&P has the country on a stable outlook.

Moody’s and Fitch already have South Africa on negative outlooks. Should S&P bypass an outlook change and move straight to a downgrade, the rand could suffer some steep losses, analysts said.

 

 

Source: Reuters

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