Rand strengthens to levels last seen in mid-March

DURBAN – The rand continued to firm on Wednesday to reach levels last seen in March with all eyes are on the US Federal Reserve as markets anticipate a bleak economic outlook and dovish stance from the US central bank.

The rand reached a fresh high of R16.55 to the following the opening of the US market.

Bianca Botes, executive director at Peregrine Treasury Solutions said in a note that the dollar remained under pressure as markets were divided on whether the Fed would take action against the rising treasury yields, while also zooming in on the first economic projections by the US central bank following the outbreak of the pandemic.

“The outcome of today’s Federal Reserve meeting will set the tone for dollar performance, and the course for currency markets as a whole. The rand remains resilient in light of the subdued dollar, with a sustained break below R16.65 opening the door to R16.50,” she said.

At 5pm the rand was bid 6c stronger than the same time bid on Tuesday at R16.58 against the dollar. Against the pound, it was 7c stronger at R21.11 and bid at R18.82 versus the euro.