Rand firmer as markets mull US-China trade detente
The rand was firmer on Thursday afternoon, extending overnight gains, when it firmed following dovish comments from US Federal Reserve chair Jerome Powell.
Emerging-market currencies were firmer in general, with the Turkish lira outperforming the local currency.
Powell’s comments that US interest rates were close to neutral have prompted investors to dial back their expectations for further interest-rate increases in the US, in 2019, said Rand Merchant Bank analyst Nema Ramkhelawan-Bhana. “Yet nothing is cast in stone and though the Fed appears to have adopted a more dovish tone, it continues to emphasise that there is no present policy path, implying more flexibility as it approaches the neutral rate, which is commonly seen as 3%.”
At 2pm the rand was up 0.57% against the dollar at R13.6999, 0.58% against the euro at R15.5695 and 0.99% to the pound at R17.4908. The euro was flat at $1.1365.
Local data was downbeat, with factory- and farm-gate inflation, as measured by the annual change in the producer price index (PPI), accelerated faster than expected in October due to record high fuel prices.
The PPI for final manufactured goods was 6.9% in October 2018 from 6.2% the previous month. The Bloomberg consensus forecast was for a rise of 6.3%.
Global focus is now expected to shift to the Group of 20 (G20) meeting in Buenos Aires.
Source: businesslive.co.za
