The rand was firm in early trade on Monday, having broken through the key 8 rand per dollar level amid a firmer euro and having shrugged off the announcement of a change in leadership at the Reserve Bank from November.
President Jacob Zuma announced Sunday that Gill Marcus will take over as
SARB Governor from November after present governor Tito Mboweni indicated that
he wants to pursue other interests.
At 9am the rand was bid at 7.9613 to the dollar from its overnight close
of 8.0425. It was bid at 11.2902 to the euro from a previous 11.3535 and at
13.1028 against sterling from 13.1250.
The euro was bid at $1.4160 from $1.4116 overnight.
A local trader said there has only been positive reaction to the news of
Marcus' appointment.
"If you read the papers there is not one negative comment ? from analysts,
economists or the unions. She [Marcus] is very well respected," he said.
He added that the rand was heading through the 8 level anyway, given the
weaker dollar and what the Dow is doing.
"It will be interesting to see what happens when London opens, but so far I
have only seen positive comments about Gill Marcus's appointment," the trader
concluded.
He said he expects the rand to trade down through 7.93, and after that the
target is 7.81. "But let's not get too carried away yet," he cautioned.
RMB analyst John Cairns said in his morning report that Marcus' appointment
as the new SARB Governor should be seen as ZAR positive.
"She comes with all the right credentials, having served as Deputy Finance
Minister, Deputy Governor at the SARB and within the private banking system. At
her appointment President Zuma also reaffirmed the independence of the Bank and
explicitly stated that he had not consulted with the ANC allies on the
appointment. As with the appointment of Pravin Gordhan as Finance Minister
there is no evidence of a shift to the left in economic policy," he said.
"We aren't aware of Marcus's views on the ZAR but again believe that with
the strong institutional set-up within the Bank that the reserve policy will
remain unchanged. For now this implies moderate reserve accumulation under the
USD/ZAR8.00 level," Cairns added.
He said rand volatility can be expected this week to come mainly in the
late afternoon as we have a string of US events and data to follow. Key here
will be Fed Chairman Bernanke's testimony to Congress on Tuesday and Wednesday.