Rands. Picture: THINKSTOCK
Rands. Picture: THINKSTOCK

The rand was marginally weaker against most major currencies on Friday morning after reaching a two-month best level against the dollar on Thursday.

The dollar staged a recovery after dipping on Wednesday owing to disappointment after president-elect Donald Trump failed to expand on his economic policies during his news conference.

The dollar has rallied in recent weeks amid the hope that the Trump administration will introduce more fiscal stimulus, deregulation and tax cuts, but the president-elect’s lack of information on the subject has created uncertainty on what he plans to do once he takes office on January 20.

Dow Jones Newswires said the dollar regained some ground against other currencies during Asian trade on Friday, with dip-buying kicking in as traders sought to take advantage of the weaker dollar.

The news wire reported that Japanese importers and other corporate entities appeared to have restarted dollar-buying on Friday for regular commercial trade settlement. US treasuries also gained during Asian trading hours.

Rand Merchant Bank chief currency strategist John Cairns said there was a partial unwinding of the Trump trades on the expectation of higher US growth but the news conference had interrupted this.

"A further Trump unwind is possible, even likely, but we still remain cautious in calling for aggressive rand gains, not least because the rand seems to have run ahead of the rest of the risk currency pack. There is also some way to go before the rand can break the cyclical best levels: the 2016 low of R13.20," Cairns said.

Other emerging-market currencies were weaker on Friday morning after performing well on Thursday. The weaker dollar and, more importantly, some indication that the Turkish central bank is taking steps to curb the currency’s weakness boosted the Turkish lira.

The currency has tumbled in 2017 due to concern over political reforms, the state of the Turkish economy and the risk of terrorist attacks.

US December retail sales are scheduled for release later in the day.

At 8.46am, the rand was at R13.5521 to the dollar from Thursday’s close at R13.5107. It was at R14.3969 to the euro from R14.3400, and at R16.4817 to the pound from R16.4370.

The euro was at $1.0626 from $1.0613.

Hywel George from Old Mutual Investments Group discusses what he thinks will top the list as 2017's global financial market trends.

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