South Africa’s rand came back up early on Monday after plunging to a three-month low last week, though concerns over the severity of the coronavirus outbreak in China limited gains. The currency on Friday plunged to its weakest level since Dec. 11 on fears over the impact of the virus outbreak and domestic power cuts. At 06:55 GMT, the rand traded at 15.0200 per dollar, 0.14% firmer than its close on Friday.
More than 900 people have so far died in China’s central Hubei province as of Sunday with most of the new deaths in the provincial capital of Wuhan, the epicentre of the outbreak.
“The resumption of activity in major industrial provinces outside of Hubei, as speculated in early morning trade, should provide some respite to EM (emerging market) currencies,” said Nema Ramkhelawan-Bhana, RMB analyst, in a note. “As the worst-performing currency in the EM complex this year, the rand will provide a yardstick for change.”
The resumption of nationwide power cuts by South African state utility Eskom on Jan. 31 has also rattled markets, as investors waited for President Cyril Ramaphosa’s state of the nation address on Thursday. Af.reuters.com speculated on Ramaphosa’s address providing a glimmer of hope on Thursday. If a clear, decisive and measurable roadmap for reform is presented, it will temper the domestic risks that lie ahead, Ramkhelawan-Bhana said.