The rand slipped against the dollar on Monday morning, but held its ground against the euro and pound. The divergent performance in the rand largely mirrored global dynamics, where the dollar staged a modest recovery against a basket of currencies.
The dollar has been under pressure of late despite key economic indicators backing a case for more interest rate increases later in the year. The rand, meanwhile, has been a key beneficiary of a weak dollar, although local political factors have also given the currency a big shot in the arm.
Later in the week there will be plenty of economic data releases that could influence the direction of the dollar in relation to other currencies, including the rand.
The US nonfarm payroll report will be closely watched, as will the outcome of the US Federal Reserve’s policy meeting on Wednesday, although markets expect interest rates to remain unchanged.
“Eight straight weeks of dollar weakness and counting is the primary game in town,” Rand Merchant Bank currency strategist John Cairns said in an e-mail note.
At 9.01am, the rand was at R11.9001 to the dollar from R11.8569, at R14.7722 to the euro from R14.7840 and at R16.8144 to the pound from R16.8286. The euro was at $1.2414 from $1.2426. – BusinessLive