The rand broke past the psychologically important R14/$ handle for the first time since late February on Wednesday morning, despite numerous reasons for investors to be cautious.
The local currency has been on the front foot since Moody's Investors Service gave an upbeat opinion on SA's credit rating, and has gained 3.3% from a 2019 low of R14.7495 reached on March 28.
At 10.41am on Wednesday the rand was 0.71% firmer at R13.9884/$, 0.63%better at R15.7671/€ and 0.53% better R18.2904/£. The euro was flat at $1.1272.
Analysts have expressed some surprise at the stability of the currency in spite of some global concern over slowing economic growth.
“Domestically, everyone is waiting for the election next month and the mud-slinging from the various political parties is having little effect on markets,” said Standard Bank currency trader Warrick Butler. “We are all so used to it these days.”
Wednesday is a busy day for the market, with a European Central Bank (ECB) policy announcement due, while the US Federal Reserve minutes from its most recent meeting will be released after local markets close.
US inflation data for March could also give the market direction, while focus is also on an EU summit, where UK Prime Minister Theresa May will request an extension of the Brexit deadline to June 30.
Emerging-market currencies have found favour recently due to signs that the US and China are close to a trade deal, said Nedbank Corporate and Investment Banking analysts.
Analysts have commented on that the stability of the rand ahead of the national elections on May 8, but have warned that volatility may pick up.
Other events also threaten to inject volatility into the market. The Italian government warned on Tuesday that it may miss its budget deficit target, setting the stage for renewed conflict with Brussels, reported Dow Jones Newswires.
gernetzkyk@businesslive.co.za
Rand improves past R14/$ despite mounting risk
The rand broke past the psychologically important R14/$ handle for the first time since late February on Wednesday morning, despite numerous reasons for investors to be cautious.
The local currency has been on the front foot since Moody's Investors Service gave an upbeat opinion on SA's credit rating, and has gained 3.3% from a 2019 low of R14.7495 reached on March 28.
At 10.41am on Wednesday the rand was 0.71% firmer at R13.9884/$, 0.63%better at R15.7671/€ and 0.53% better R18.2904/£. The euro was flat at $1.1272.
Analysts have expressed some surprise at the stability of the currency in spite of some global concern over slowing economic growth.
“Domestically, everyone is waiting for the election next month and the mud-slinging from the various political parties is having little effect on markets,” said Standard Bank currency trader Warrick Butler. “We are all so used to it these days.”
Wednesday is a busy day for the market, with a European Central Bank (ECB) policy announcement due, while the US Federal Reserve minutes from its most recent meeting will be released after local markets close.
US inflation data for March could also give the market direction, while focus is also on an EU summit, where UK Prime Minister Theresa May will request an extension of the Brexit deadline to June 30.
Emerging-market currencies have found favour recently due to signs that the US and China are close to a trade deal, said Nedbank Corporate and Investment Banking analysts.
Analysts have commented on that the stability of the rand ahead of the national elections on May 8, but have warned that volatility may pick up.
Other events also threaten to inject volatility into the market. The Italian government warned on Tuesday that it may miss its budget deficit target, setting the stage for renewed conflict with Brussels, reported Dow Jones Newswires.
gernetzkyk@businesslive.co.za
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