Rand maintains gains as dollar pauses for breath

The rand held onto gains of about 1% against major global currencies on Tuesday, buoyed by generally positive global sentiment, but ahead of risk-events beginning on Wednesday.

After being on the back foot from a resurgent dollar on Monday, emerging-market currencies including the rand had gained overnight, something analysts attributed to profit-taking in the greenback.

Signs of conciliation between the US and China over trade issues had lifted sentiment, with the Dow registering a strong performance on Monday.

There were no key economic data releases or big moves in fixed-income instruments to take the cue from on Monday, FXTM chief market strategist Hussein Sayed said. Traders were waiting for Wednesday’s minutes from the latest US Federal Reserve federal open market committee meeting, to see any new signals related to US monetary policy.

Locally, Wednesday also sees the release of consumer inflation data for March, while on Thursday, the Reserve Bank will announce its latest monetary-policy stance.

Some focus this week is also on the price of Brent crude, which has approached $80 a barrel. Following a widely-criticised election in Venezuela at the weekend, many analysts expect the White House to soon impose sanctions on that country. Targeting Venezuela’s oil production would further constrain tight global supply.

Among the rand’s peers, the Turkish lira remained weaker, but had come off record lows reached on Monday.

At 3pm the rand was at R12.5924 to the dollar from R12.6748, at R14.8349 to the euro from R14.9494 and at R16.9224 to the pound from R17.0242.

The euro was at $1.1781 from $1.1791.

Source: businesslive.co.za