Rand strengthens to best level since April as it flirts with R14/$
The rand strengthened on Thursday morning to reach its best level since mid-April, with the local currency testing the R14/$ mark in early trade.
The rand has been supported by expectations that central banks in Europe and the US will cut interest rates, along with strong gold prices and “ongoing carry trade by yield seekers”, Bianca Botes, treasury partner at Peregrine Treasury Solutions, said in a note on Thursday.
The currency has also been boosted by SA’s trade surplus in May and a slight improvement in the domestic business confidence index.
At one stage on Thursday morning, the rand reached R14.0042/$.
It later retreated slightly to R14.0265/$, but remained 0.2% stronger for the day.
“The rand is looking as though it wants to test the R14/$ level,” said Andre Botha, senior dealer at TreasuryOne.
Meanwhile, the rand was slightly stronger against the pound and euro, at R17.6523/£ and R15.8243/€.
“The rand is defying the current rhetoric by US President Donald Trump as he accuses China and the eurozone of currency manipulation, which normally would equate to some uncertainty in the markets, which is normally bad for emerging-market currencies,” Botha said.
While the rand was flirting with the R14/$ level, “with the US out of the market, major moves are unlikely, with no major data releases or events scheduled for today”, he added.
US markets are closed on Thursday for Independence Day.
Source: businesslive.co.za
