The rand was firmer on Monday afternoon, pushing to a one-month high against a dollar, as markets considered forthcoming monetary and fiscal stimulus in the wake of flagging global economic growth.
Global data was downbeat, with Chinese exports to the US slumping 16% in August — a surprise to the market — while Japanese second-quarter growth was also disappointing.
China has already cut reserve requirements for banks, a move that will inject liquidity into the economy, while markets are expecting the European Central Bank to announce a stimulus package during its policy announcement on Thursday.
Barclays Research warned in a note on Monday that those hoping for large rate cuts or quantitative easing were likely to be disappointed, and the dovish message from the bank was likely to take the form of a renewed commitment to reach a higher inflation target.
At 2pm the rand was 0.86% firmer at R14.6763/$ — its best level since August 2. It was 0.79% up at R16.1971/€ and 0.16% at R18.1436/£. The euro was 0.09% firmer at $1.1036.
Earlier, UK GDP for the second quarter was slightly better than expected, although risks from Brexit-related headlines persist.
It is likely that the rand will find it difficult to push past the R14.65/$ support level in the short term, while a move to R14.90 could presage weakening to about R15.10, Standard Bank currency analyst Warrick Butler said in a note.