Rand firms against dollar in early trade

The rand firmed in early trade on Tuesday morning against the dollar, strengthening 0.5% to trade at R13.75/$ at 09:54. 

The dollar index, which tracks the dollar's relative strength against a basket of currencies of its major trading partners, was marginally weaker on Tuesday, down 0.1% at 94.78 at 09:34. 

“The rand remained relatively flat throughout Monday as the economic data released reflected the structural difficulties facing the local economy,” said Bianca Botes of Peregrine Treasury Solutions in a morning statement. 

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“The weakness in the local markets is, however, not unique to South Africa, but resembles an emerging market crisis as a whole as geopolitics weigh in on investor risk appetite.”

Botes said she expected the local currency to be range-bound on Tuesday, with downward pressure meaning it may fall to R13.90/$.

NKC African Economics gave an expected trading range between R13.65/$ and R13.95/$.

With no major local economic data set for release on Tuesday, investors will likely look to the US, where factory order data for May will be published, and Europe, where producer price index and retail data will come out. 

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