Rand softer as market watches ongoing attempt to unseat Robert Mugabe

The rand was slightly weaker on Tuesday afternoon, but off its worst levels, as negative sentiment related to SA’s forthcoming credit-review decisions, and event-risk related to Zimbabwe, cast a shadow over the market.

The rand is expected to trade in tight ranges this week ahead of the decisions by ratings agencies S&P Global and Moody’s, and so far has been largely unaffected by the ongoing political battle to remove Zimbabwean President Robert Mugabe.

Efforts to impeach Mugabe were under way on Tuesday afternoon, with analysts warning that should the situation turn violent, the local unit may come under some pressure.

The developing situation was not all good news, and the South African Development Community was against recognising any party that seized control through a coup d’état, said FXTM research analyst Lukman Otunuga.

“While the military are insisting it is not a coup, if it looks like a duck, swims like a duck and quacks like a duck, it is a duck,” he said.

The euro was little changed to the dollar on Tuesday afternoon, while most emerging-market currencies were flat, with the exception of the Turkish lira, which was near an historic low to the greenback.

The lira has been hit by continued political tension between Turkey and the US, while the former’s central bank tightened monetary policy on Tuesday, reported Dow Jones Newswire.

At 3pm, the rand was at R14.0811 to the dollar from R14.0438, at R16.4995 to the euro from R16.4766 and at R18.6537 to the pound from R18.5810. – Financial Mail