By the close of trade on Friday, the South African rand had weakened against the US dollar.

  • This was after ratings agency, S&P Global, changed its outlook on South Africa’s sovereign credit rating from stable to negative, citing ailing growth and the government’s worsening fiscal and debt trajectory.
  • Meanwhile, the greenback gained ground, as the latest economic data underscored a resilient domestic economy.
  • The US manufacturing PMI accelerated at its fastest pace in November and services PMI also rose more-than-expected during the same period.
  • The Michigan consumer sentiment index unexpectedly rose in November.
  • On the trade front, Federal Communications Commission voted to label Chinese telecoms, Huawei and ZTE as a national security risk, removing them from accessing a government subsidy program.
  • The yield on benchmark government bonds rose on Friday. The yield on 2020 bond advanced to 6.88% while that for the longer-dated 2026 issue rose to 8.39%.

In early trade on Monday, the US dollar is trading 0.2% lower against the South African rand at R14.6901, while the euro is trading 0.2% lower at R16.1886.  The British pound has declined 0.1% against the South African rand to trade at R18.8724.

By the close of trade on Friday, the euro declined against most of the major currencies.

  • The composite PMI for the eurozone dropped in November.
  • Services PMI unexpectedly fell during the same period.
  • In Germany, gross domestic product (GDP) rose in line with market expectations in 3Q19. Further, preliminary reading of manufacturing PMI rose more-than-expected in November, while services PMI unexpectedly fell during the same period.
  • Meanwhile, the European Central Bank (ECB) President, Christine Lagarde, stated that the eurozone needs to create more of its economic growth at home, through greater public investment, to withstand weakness abroad and become more balanced.

In early Monday morning trade, the euro has marginally slipped against the US dollar to trade at $1.1020, while it has weakened 0.1% against the British pound to trade at GBP0.8580.

Technical: