Rand keeps gaining despite US Fed rate hike | Fin24
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Rand keeps gaining despite US Fed rate hike

Sep 27 2018 18:13

The rand touched R14/$ on Wednesday evening, trading 0.61% stronger at R14.03/$ by 6.00pm SA time.

It had earlier in the day surprised analysts by firming during the day and maintaining its gains even after an interest rate hike by the US Federal Reserve Bank.

Bianca Botes of Peregrine Treasury Solutions said in a morning note that market watchers had not expected the local currency's behaviour.

Andre Botha, Senior Dealer at TreasuryOne, said: "As expected, the US hiked interest rates by another 25 basis points yesterday evening. Furthermore, they indicated that there could be a hike in December and three more in 2019. So basically, they followed the script as was outlined in the past couple of days. It was not surprising to see the US dollar trading flat against during the announcement as the rate hike and forward path was priced in.

"What was not expected was the reaction of the Rand during evening trade as we broke through the R14.1000 level in late evening trade. Reasons for this move are a little vague but it could be that the risk sentiment has turned in favour of emerging markets and that the market is taking President Ramaphosa at his word that land reform would not hinder the agriculture once it starts being implemented."

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rand  |  dollar  |  markets  |  currencies


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