Rand pulls back from two-week highs as dollar shakes off losses

The rand staged a mild retreat from a two-week high on Wednesday morning, as the dollar clawed back its recent losses. The recovery in the greenback came despite US President Donald Trump deepening his criticism of the US Federal Reserve for raising interest rates.

The world’s most influential central bank has raised interest rates three times in 2018, boosting the value of the dollar at the expense of other currencies. At least one more rate hike is likely before the end of 2018.

On Wednesday night, the Fed will release minutes of its most recent meeting, which are likely to provide short-term direction for the markets.

Excluding the current session, the rand and other emerging-market currencies have steadily been gaining ground after a bout of volatility in September.

Standard Bank trader Warrick Butler said a decision by Moody’s Investors Service to delay the review of SA’s debt rating lifted sentiment toward the rand. Moody’s is the only major ratings agency that has the country’s debt rating at investment grade. Fitch and S&P Global Ratings junked the country’s rating in 2017.

Moody’s has said SA’s credit rating may be upgraded, depending on certain economic reforms.

At 10.01am the rand was at R14.2319 to the dollar from R14.1646, at R16.4560 to the euro from R16.3950 and at R18.7252 to the pound from R18.6754. The euro was at $1.1564 from $1.1574.

The local bonds were little changed in early trade, but fared a lot better than a few weeks ago.

The yield on the benchmark R186 bond was at 9.15%, from 9.165% at its last settlement.

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