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Rand flat as dollar remains under pressure

The rand was flat against major currencies on Friday morning as the dollar remained under pressure after the US Federal Reserve increased interest rates on Wednesday but indicated it would not speed up the pace of tightening in 2017.

Standard Bank trader Oliver Alwar said the “rand traded like the king of all currencies over the last 36 hours, indeed it was the best-performing currency in the world post the US Federal open market committee meeting”.

He said the rand was almost 3 percent stronger since Fed’s policy meeting but it was not the only currency that had benefited from the Fed’s less hawkish stance. Riskier emerging-market assets had rallied aggressively due to the Fed’s position, said Alwar.

“I would not say the rhetoric was dovish but rather passively hawkish and conservative, two more rate hikes are still pencilled in for this year and one more for 2018, so the policy normalisation will continue,” said Alwar.

TreasuryOne dealer Phillip Pearce said trade would be dominated by any headlines from the Group of 20 (G-20) finance ministers and central bank governors meeting on Friday and the “hangover” from this week’s events.

The rand was also firmer against the pound after the Bank of England (BoE) left interest rates unchanged at 0,25 percent.Nedbank Corporate and Investment Banking analysts said that after the significant gains the rand posted overnight, the levels of local participation in the markets increased as local participants took advantage to hedge their positions. Indications are that this was set to continue into the close of the week, with many local participants taking a long weekend.

At 9.17am the rand was at 12,7704 against the dollar from Thursday’s 12,7717,  13,7639 against the euro from  13,7570 and at  15,7639 against the pound from  15,7770.The euro was at $1,0778 from $1,0772. – BusinessLive

Source :

BusinessLive

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