Johannesburg – The rand strengthened on Friday afternoon after renewed hopes that the biggest economy in the world will avert the fiscal cliff.
“The rand strength is down to the possibility of the US fiscal cliff being avoided. This has been factored into the market. The rand and dollar are strengthening at the same time. Normally its not like this. The US avoiding the fiscal cliff brings back positive sentiment and the market’s risk appetite into play‚” said Mark Kalkwarf‚ a senior portfolio manager from the Iquad Group.
At 3.49pm‚ the rand was bid at R8.6795/$ from Thursday’s close of R8.6886. The local currency was bid at R11.1898/€ from its previous close of R11.2608 and at R13.8876 against sterling from R13.9342 before.
The euro was bid at $1.2895 from Thursday’s close of $1.2960.
“One more rand positive is Greece getting its bailout earlier in the week and Spain is asking for funds‚ which was expected by the markets. This eases liquidity pressures in the EU‚” Kalkwarf said.