The rand held steady in early trade on Tuesday following news that the ANC had given President Jacob Zuma an ultimatum to step down.
The rand had rallied on Monday afternoon following speculation Zuma had finally caved under pressure and decided to resign. The Presidency had rejected this at the time as “fake news”.
The local currency, which held steady in the high R11.90s to the greenback for most of the trading day Monday on the back of dollar weakness and signs of Zuma’s imminent departure, had strengthened almost 1% to trade at R11.88/$ by 4.30pm on Monday.
For the rest of the trading session and in overnight trade in New York, the local unit traded in a narrow band before closing trade on R11.94/$.
The rand weakened 0.3% to R11.97/$ at 03.28am, shortly after news broke that Zuma was given an ultimatum to resign after yet again refusing a request to resign voluntarily.
By 06.23am, the unit was trading 0.08% firmer at R11.93/$.
Market watchers said earlier on Monday they expected the rand to firm to as high as R11.70 to the US dollar should Zuma step down as head of the state.
Musa Makoni, a trader at EasyEquities, expected positive sentiment to drive the local unit to below R11.80, while Investec chief economist Annabel Bishop expected the currency to strengthen to R11.70/$ on Zuma’s ouster.
Alex Paynter, market analyst of Dynamic Outcomes, told Fin24 on Monday afternoon the market movements have not followed rational thinking, and rarely do.
“This is because every bit of information, including expectations, fears, perceptions and doubts, are all factored into the market price at any point in time. I believe most people have already factored in his [Zuma’s] resignation, and his departure may have some short term reaction, but may not have as big an impact as people would have thought.”
ANC president Cyril Ramaphosa, meanwhile, on Sunday told a crowd of about 3 000 people on the Grand Parade in Cape Town that “our people want this matter finalised”.
The ANC national executive committee (NEC) will be doing precisely that. We know you want closure on this matter,” he said.ANC president Cyril Ramaphosa, meanwhile, on Sunday told a crowd of about 3 000 people on the Grand Parade in Cape Town that “our people want this matter finalised”.
“The National Executive Committee will be doing precisely that. We know you want closure on this matter,” he said. – News24