Rand firms against the dollar as euro cheers possible Brexit deal
The rand was firmer on Thursday afternoon, benefiting from a weaker dollar environment, as reports circulated the EU and UK were close to a deal covering financial services.
Financial services is the lifeblood of the UK economy, and any barriers to transactions with the continent would likely deal a death blow to the UK economy, said BK Asset Management MD Boris Schlossberg in a note.
The euro, which the rand usually tracks, gained 0.8% against the dollar, while the gold price was also higher.
Gold, which generally supports the rand, usually benefits from a weaker dollar as it makes commodities cheaper for those buying in other currencies.
“Today is a primary example of how gold moves are not always straightforward and also how, despite being a traditional safe haven, it may benefit greatly from a Brexit deal,” said Oanda analyst Craig Erlam.
Local news was somewhat downbeat, with the Absa purchasing managers index (PMI) earlier printing at 42.4 points in October from September’s upwardly revised 44.5 points.
At 2.30pm, the rand at R14.5617 to the dollar from R14.4776, at R16.6008 to the euro from R16.7179, and at R18.8216 to the pound from R18.8721. The euro was at $1.1400 from $1.1311.
Source: businesslive.co.za
