Local political risk will continue to dominate the rand, Jacques Du Preez of RMB said on Thursday.
The local unit would be kept on the back foot for a possible test of 8,25 to 8,30 resistance against the dollar, he added.
The dollar/rand rate looked set for increased volatility over the next few days, with a trading range for Thursday of 8,05 to 8,25.
Tuesday locally had its fair share of surprises as 11 ministers tendered their resignations, including Finance Minister Trevor Manuel and Deputy President Phumzile Mlambo-Ngcuka, sending the JSE and rand into freefall, Du Preez said.
The rand weakened from below eight to 8,21 on the day and then strengthened to 8,05 on the news that Manuel would stay on in the new administration if asked, finally closing at 8,17.
On Wednesday all eyes were on US Treasury Secretary Henry Paulson and Federal Reserve chairperson Ben Bernanke testifying before a US congressional committee justifying the need for a $700-billion bail-out plan for Wall Street. Markets gained ground on the news that investor Warren Buffet would be injecting $5-billion of capital for a share in Goldman Sachs.
”The developments on the US bail-out plan will have implications for emerging-market risk aversion in general as George Bush has called an emergency meeting with Congress for today [Thursday] to flesh out the details on the bailout scheme,” Du Preez said. — Sapa