Rand slides ahead of state of the nation address

THE rand began to weaken on Thursday morning against major currencies as markets prepared for President Jacob Zuma’s state of the nation address.

The rand weakness comes despite the dollar weakening following Federal Reserve chairwoman Janet Yellen’s first day of testimony to Congress. Ms Yellen’s remarks were interpreted to mean that there would be no rate increase in March.

At 8.33am‚ the rand was at R15.9140 against the dollar from a previous close of R15.8836.

Against the euro‚ the rand was at R17.9815 from R17.9428 and was at R23.1075 against the pound from R23.0800 previously.

The euro was at $1.1300 from $1.1294 previously.

Nomura emerging-market economist Peter Attard Montalto said the state of the nation address would be viewed as more important than the budget speech as it would contextualise the policies on issues affecting growth and the investment environment.

“Market expectations have been greatly inflated by the government since the start of the year and we think it will be difficult to meet them. Locals appear more willing to look for whatever positives they can‚ but foreign investors may well be more sceptical‚” he said.

Mr Zuma’s speech is due to commence at 7pm.

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