The rand weakened dramatically from Monday’s R12.29 to the dollar to nearly breach R12.70/$ during Tuesday’s Workers’ Day holiday.
The dollar rallied against most currencies ahead of a US Federal Reserve interest rate decision, which will be announced at 8pm South African time on Wednesday.
US Fed chairman Jerome Powell is not expected to announce a change to the ceiling of the central bank’s target range from the 1.75 percent it was raised to in March.
But the US central bank is expected to raise its interest rate ceiling to 2 percent by the end of this year, and the market will be listening for clues in Powell’s commentary on how soon that may happen.
The dollar’s rally sent the rand to its weakest level since December, to trade at R12.65 to the dollar at 6.35am on Wednesday morning.
Steinhoff International’s share price closed 0.78 percent down at €0.13 in Frankfurt on Tuesday, which at R15.18 to the euro equated to R1.97 — higher than the R1.92 it ended Monday at on the JSE.
The rand was at R17.22 to the pound.
Master Plastics, a company separately listed from Astrapak in May 2017, said on April 4 it expected to report on Wednesday it had turned profitable during the year to end-February.
Master Plastics said it expected to report headline earnings per share (HEPS) of about 30c, compared with a headline loss per share of 13.9c in the prior year.
Wednesday is fairly busy on the economic data front, with the Absa-sponsored manufacturing purchasing managers index (PMI) scheduled for release at 11am, and April’s new vehicle sales figures at about 2pm.
Absa’s monthly PMI, which tends to foreshadow manufacturing data from Stats SA by two months, briefly recovered back over the 50-point neutral mark in February but then fell back sharply to 46.9 in March.
“We foresee the PMI remaining under 50, but lifting somewhat to around 48 points,” Investec Bank economist Lara Hodes said in her weekly note.
She anticipates new vehicles sales to lift by about 6 percent in April from the same month in 2017.
The National Association of Automobile Manufacturers of SA (Naamsa) reported a 1.1 percent annual growth rate in new vehicle sales to 49,233 units in March, which it attributed to people buying cars ahead of April’s value-added tax (VAT) increase along with higher vehicle emission taxes. – BusinessLive