British pound gains but African rand plunges on finance minister probe

[NEW YORK] The British pound edged higher on the dollar Tuesday but South Africa's rand plunged after Finance Minister Pravin Gordhan was summoned by police.

The pound gained after eurozone purchasing manager data for August, while not stellar, suggested little impact so far from the British vote in June to pull out of the European Union.

Sterling rose to US$1.3194, its best level on the greenback since August 4, and to 85.70 pence against the euro.

The rand gave up 3.0 per cent to 14.00 to the dollar as the summon for Gordhan, believed related to his work as Revenue Service commissioner, raised fears that he could be forced from the finance minister job.

After being moved from the finance portfolio in 2014 amid testy relations with President Jacob Zuma, Gordhan was restored to the job early this year as the country's lack of solid economic leadership took a heavy toll in the markets.

The dollar was little-changed against the euro at US$1.1307, with most eyes on the US Federal Reserve's central banking symposium in Jackson Hole, Wyoming at the end of the week.

Fed Chair Janet Yellen will speak on Friday and markets are deeply hopeful for some clear direction on monetary policy, especially the path for rate increases this year.

"The currency market remains highly skeptical of any Fed tightening and the greenback remains under pressure across the board," said Boris Schlossberg of BK Asset Management.

AFP