South African rand falls as virus death toll knocks risk appetite

The rand traded at 14.9500 per dollar, 0.67pc weaker than its previous close. South Africa, investors await Pr
13 Feb, 2020
  • The rand traded at 14.9500 per dollar, 0.67pc weaker than its previous close.
  • South Africa, investors await President Cyril Ramaphosa's state of the nation address scheduled to start at 1700 GMT.

At 0640 GMT, the rand traded at 14.9500 per dollar, 0.67pc weaker than its previous close.

"Emerging markets and risk assets are trading weaker as indications from China are of a spike in both the infection rate and the number of deaths reported as a result of the coronavirus," analysts at Nedbank wrote in a note.

"This has seen the rand trade back above the 14.9000 level."

Investors sought safe havens after China's Hubei province, the epicentre of a coronavirus outbreak, reported a sharp jump in the number of new cases, provided a grim reminder of the threat to the global economy that has shaken markets in recent weeks.

In South Africa, investors await President Cyril Ramaphosa's state of the nation address scheduled to start at 1700 GMT.

He is expected to give details on government plans for ailing state-owned enterprises, including power utility Eskom's battle to keep lights on, as well as growth boosting and job-creation measures.

Power cuts in recent months and a string of dismal economic data this week have underscored the weakness in the South African economy.

Data on Wednesday showed retail sales in December fell 0.4pc year-on-year, lagging market expectations for an increase of 1.5pc.

The followed data on Tuesday showing unemployment remained at an 11-year peak in the fourth quarter and manufacturing output for December shrank 5.9pc on-year.

In fixed income, the yield on the instrument due in 2030 was up 1.5 basis points at 8.895pc in early trade.

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