The rand was relatively stronger on Monday morning, riding positive global market sentiment.
Markets appear to have viewed the better than expected US nonfarm payrolls report on Friday in a favourable light.
The world’s largest economy created many more jobs (223,000) in May than expected, pushing unemployment to an 18-year low. Wages also grew, suggesting a tightening labour market.
But the US jobs report did not seem to translate into sizable gains for the dollar, although the yield on benchmark US treasuries ticked higher.
Nedbank Corporate and Investment Banking analysts Mehul Daya and Walter de Wet viewed the current relative strength in the rand as temporary, sticking to their year-end target of R13.10/$.
“We still maintain the view that the first-order driver for rand and EMs [emerging markets] forex will be the US dollar, despite the stable inflation outlook in the SA and other EMs.”
Markets also chose to ignore the fear of a trade war, which has cast a shadow on global growth.