Rand weaker as business confidence slips in January

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The SA Chamber of Commerce and Industry business confidence index dropped in January; analysts expected an uptick

The rand looked set to snap its three-day winning streak on Thursday morning, with data earlier showing a surprise decline in business confidence in January.

The SA Chamber of Commerce and Industry’s business confidence index fell 0.9 inex points compared to December; the Trading Economics consensus was that it would edge up 0.3 points. A meaningful rebound in confidence in the short term was unlikely, despite an improvement in global economic conditions in the first half of January, said Mercato Financial Services analyst Nico du Plessis in a note.

With persistently weak demand dynamics, increased fiscal slippage and lingering policy uncertainty, business sentiment in SA is likely to remain subdued, if not deteriorate, in coming months, said Du Plessis.the rand had weakened against major currencies and was down 0.74% to R14.8648/$, 0.65% to R16.3505The local currency has lost 1.37% against the dollar so far this week.

Global equity markets were benefiting from optimism around the coronavirus outbreak after reports of progress in finding a viable treatment, which were downplayed by the World Health Organisation, as well as an announcement by China that it would cut tariffs on US goods.

 

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