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Rand takes breather after best run in months

Jul 13 2018 10:46

The rand flirted with R13.20/$-level on Friday morning before weakening somewhat, following its strong showing on Thursday afternoon. 

It opened Friday at R13.30/$, and strengthened to R13.22 before weakening to trade at R13.34 to the greenback at 10:10, down 0.37% on the day.

The dollar index, which tracks the dollar's relative strength against a basket of currencies of its major trading partners, was 95.19 at 10:21, up 0.39%. 

Earlier in the week economists were debating whether the local currency would break below the R13.50/$-level due to a combination of risk-off sentiment for emerging markets caused by US President Donald Trump's tariffs clash with China, and a strong dollar.

But following the release of US inflation figures on Thursday afternoon, the rand strengthened by 1.6% for one of its best days in months

“The South African currency was [on Thursday] one of the top-performing emerging market currencies amid improved emerging market sentiment as China held off from retaliating against fresh US tariff threats,” said NKC African Economics in a morning note. 

“The rand was also boosted by slightly better-than-expected (albeit overall still fairly gloomy) mining and manufacturing production data and flat US dollar following the release of US inflation figures that were in line with expectations.”

NKC put the expected trading range at between R13.20/$ and R13.50/$.

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rand  |  emerging markets  |  dollar  |  markets  |  currencies
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