Rand’s rally suffers setback as dollar gathers momentum
For most of this week the rand has been resilient against the dollar, but on Friday the dollar gathered momentum against major currencies, especially the yen
The rand’s recent rally suffered a setback on Friday as the dollar gathered momentum against major currencies, most notably the Japanese yen. For the most part this week, the local currency has been resilient against the dollar, which has drawn support from a pick-up in consumer inflation, which reinforced prospects of high interest rates in the US.
The US consumer price inflation quickened to an annual rate of 2.4% in January, surpassing the 2% the Federal Reserve targets, from 2.1% in December.
The rand slipped to session lows of 13.1270 to the dollar, further backing away from 12.9028, which it hit earlier this week, which was its best level and last seen in the fourth quarter of 2016.
TreasuryOne dealer John Moni said in a note that it was probable that large international funds and banks were unwinding positions heading into the weekend following a volatile week.
At 11.49am, the rand was at R13.1026 from Thursday’s R13.0200. It was at R13.9574 to the euro from R13.9015 and at R16.2810 to the pound from R16.2612.
The dollar was at $1.0652 to the euro from $1.675 previously, and at ¥112.8430 from $113.2375.