Rand holds its ground after choppy week for global markets

The rand was relatively steady on Friday morning, having managed, on balance, to hold its ground this week, despite poor global sentiment.

The local currency tends to be more affected by shifts in global risk sentiment because it is one of the most highly traded currencies in emerging markets.

Though it has been volatile over the past four days, the rand is marginally positive for the week so far, helped mainly by a weaker dollar.

The dollar was much weaker against a basket of currencies, notably the euro and yen, after the US Federal Reserve forecast two increases in interest rates in 2019, instead of the three it previously anticipated.

“The prospect of the government shutdown in the US is further weighing on the dollar,” according to Andre Botha, senior currency dealer at TreasuryOne.

Local bonds held steady in early trade and were much stronger on the week, helped in part by the recent slide in international oil prices. That could help offset the net effect of the weaker rand environment.

Brent crude was marginally higher on the day at $55.09 per barrel, but still hovered near its lowest level in more than a year.

The rand was still about 15% weaker against the dollar so far in 2018, according to Iress data.

At 9.34am, the rand was 0.74% stronger against the dollar at R14.3012, 0.54% better against the euro at R16.3955, and 0.58% stronger against the pound at R18.1348. The euro was 0.17% better against the dollar at $1.1465.

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