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The rand, which has been strengthening since Thursday last week, may break through the R15/$ barrier on Tuesday, but any gains will be limited by emerging market weakness, according to analysts.
The local currency opened trade at R15.19 to the greenback and was changing hands 0.96% stronger at R15.05 by 09:30.
“The US dollar is also a little weaker which will help the cause of the rand, and with little in the way of data today a weaker dollar might help the rand test the R15.00 level,” said Andre Botha, senior currency dealer at TreasuryONE, in a morning note.
“Locally, it seems that the rand has shrugged off the political noise of the weekend and is happy to trade in a 20c range for now. The overwhelming feeling is that the market is due a correction but is unclear on what the catalyst will be,” he explained in a market update.
He added that it is unlikely that the rand would make really significant gains as its emerging market peers such as the Turkish lira, Argentinian peso and Russian ruble are weighing down the rest.
There is a lack of positive sentiment in emerging market currencies due to the US-China trade dispute, poor data from Turkey, uncertainty in the Argentinian market and possible sanctions against Russia by the US, Botha explained.
The dollar index, which tracks its relative strength against a basket of currencies of its major trading partners, was 95.003 at 10:36 on Tuesday, down 0.15% on the day.
Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions said that the local manufacturing data due for release by Stats SA, as well as data on US job openings will likely influence markets.
Poor manufacturing data may knock the rand, she said, and its volatility was likely to remain.
Analysts from NKC Economics, meanwhile, expect the rand to trade between R15 and R15.30 to the greenback.
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