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Rand stronger on early Omicron signs; retail data in focus

In early trade the rand was at R15.82 against the dollar, roughly 0.2% stronger than its previous close.
Image: Shutterstock

The rand extended this week’s gains early on Wednesday, as signs that the Omicron coronavirus variant identified locally is causing mainly mild infections supported risk appetite.

Retail sales data for October due around 1100 GMT and business confidence figures for November due at 0930 GMT were also in focus.

At 08:20, the rand traded at R15.82 against the dollar, roughly 0.2% stronger than its previous close.

Financial markets have been highly sensitive to news about Omicron, which South Africa alerted the world to late last month, triggering global alarm and the imposition of travel restrictions.

But anecdotal accounts from South African doctors and researchers suggest that it may be causing less severe clinical symptoms than other coronavirus variants, though they caution that more research is needed before definitive conclusions can be drawn.

Also supporting sentiment, a proposal to change the constitution to explicitly allow expropriation of land with no compensation failed to win sufficient votes in parliament on Tuesday. Opposition parties and some investors have seen the proposal as threatening property rights.

Economists polled by Reuters have forecast that October retail sales will show growth of 1.8% year on year, slightly lower than September’s 2.1% reading. The retail sector has had a mixed year, as it was one of the major casualties from July riots that contributed to an economic contraction in the third quarter.

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