Rand keeps a grip on hefty gains of this week’s rally
Although the currency showed no signs of giving up the week’s steep gains, a strategist has warned that any rallies are vulnerable to profit-taking
THE rand was in a stable range on Friday morning, holding the steep gains it made in a week dominated by central bank policy meetings. "Any market rally is always prone to a profit-taking/covering bounce. Be aware these can be vicious and quick," said Rand Merchant Bank currency strategist John Cairns. "Be aware also that Fridays are particularly prone to this sort of action as traders close out positions before the weekend." The rand tripped on Thursday after Reserve Bank governor Lesetja Kganyago said the end of the hiking cycle could be in sight if the inflation outlook improved further. Consumer price inflation (CPI), which the Bank considers closely in deciding on rates, crept back into the 3%-6% target range in August. The Bank said CPI was expected to peak at 6.7% in the fourth quarter of 2016, down from earlier forecast of 7.1%. Cairns said: "Our bias is to see the rand losses as a stumble in the rally rather than anything more. The rally has been so amazingly strong that it...
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