Rand holds the line amidglobal tensions and local issues

Rand holds the line amidglobal tensions and local issues
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JOHANNESBURG – The rand has held the line over the past month amid global trade and conflict tension and despite an economy under pressure with continued Eskom rolling black-outs. The rand traded close to the R14.50 to the dollar level yesterday before recovering to R14.40 as the US consumer price index was below market expectations and US Treasury yields went lower in trade. On Wednesday by 5pm it traded at R14.3421 to the dollar, up 5 cents from the same period on Tuesday. In the past seven days the rand has gained 1.35 percent and is now back, a bit stronger than the levels it was at 30 days ago. The currency’s stable performance has given credence to speculation that Reserve Bank governor Lesetja Kganyago will maintain the repo rate steady today when he announces the first decision of the Monetary Policy Committee this year. But there has been concern that nuances in yesterday’s markets could disrupt the rand’s performance in the days ahead making the currency spin from being the best performing emerging market (EM) to being the worst on the waning of confidence in the spirit of the US-China trade deal and concerns about local issues ahead of the budget speech by President Cyril Ramaphosa. Economists said the calm markets into December, which were beneficial for risky assets, could turn sharply around. Andre Botha, a senior dealer at TreasuryOne, said while the rand thrived when the bond market looked attractive due to high yields, “unfortunately, the opposite […]

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