Rand weaker amid renewed expectation of December rate hike in US
Local currency is softer against the dollar at midday on Friday as emerging-market currencies are sold off amid speculation of imminent US rate hike
The rand was weaker against the dollar at midday on Friday as emerging-market currencies were sold off amid speculation that the Federal Reserve would hike rates in December following Donald Trump’s election as US president. Wichard Cilliers, the head of dealing and a director at TreasuryOne, said the shift came after investors had pulled money out of emerging markets, redirecting the flow that came after the confirmation of Trump’s victory. Cilliers said that rand could correct back towards the mid-R13s against the dollar. The fear and uncertainty around a Trump presidency may have waned, but the chance he will pursue infrastructure stimulus projects has pushed the US yield on the 10-year bond rate to 2.1509% from 2.0619%. The Brazilian real and Mexican peso tumbled 5% and 3.69% respectively against the dollar on Thursday as the prospect of higher rate increases in the US gathered momentum. RMB analyst Celeste Fauconnier said there was still volatility due to Trump’s election. She ...
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