Rand rallies in anticipation of May’s Brexit speech

JOHANNESBURG – The rand rallied on Tuesday morning against major currencies as UK Prime Minister Theresa May was expected to confirm that Britain will leave the EU’s common market.

According to excerpts of May’s speech that were given to the media‚ the prime minister will set out 12 priorities for the negotiations with the EU after Brexit is triggered in March when she speaks later in the day.

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Rand Merchant Bank currency strategist John Cairns said markets had absorbed these snippets from May’s upcoming speech “remarkable well”.

The sterling even managed to bounce somewhat overnight nevertheless‚ expect volatility when she actually speaks‚” said Cairns.

The rand started the week on a shaky ground‚ retreating more than 1 percent due to uncertainty ahead of Donald Trump’s inauguration as US president.

Standard Bank trader Warrick Butler said the rand’s 20c movement on Monday was more about liquidity conditions than anything substantial in the market.

“The amount of people that keep asking me in panic about why the rand ‘just moved’ 5c higher suggests that they have still not been able to adapt to the massive change in market conditions we have experienced over the past couple of years.

“Sometimes there are pockets of liquidity where you can transact anything up to $100m‚ sometimes there are vacuums where no one has any interest and the market gaps 5c. Nobody needs to have died or said something stupid for it to happen‚ it just does‚” Butler said.

At 8.59am‚ the rand was at R13.5558 to the dollar from Monday’s close at R13.6908. It was at R14.4378 to the euro from R14.5200‚ and at R16.4250 to the pound from R16.4990.

The euro was at $1.0651 from $1.0602.

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