Rand trades flat against major currencies on slow day
The post-increase struggling dollar remains the driving force in the market, analysts at Rand Merchant Bank say
The rand was flat in late afternoon trade on Monday, trading within a narrow range against major currencies ahead of Human Rights Day on Tuesday.
However, the rand remained in the firmer range achieved last week following the US Federal Reserve's more doveish approach to raising US interest rates, with it having chosen to raise rates gradually over the year, as opposed to the steep and short-term increase expected by much of the market.
Analysts at Rand Merchant Bank said the post-increase struggling dollar remained the driving force in the market, and the release of local CPI and current account data, due on Wednesday should add to the rand's strength.
They said they expected the current account deficit to be only 2.4% of GDP and inflation was also expected to moderate further. The rand "is already starting to look a little overextended" and further gains may be constrained, the analysts said.
TreasuryOne currency dealer Andre Botha said that US President Donald Trump's tweets regarding Germany owing the US in terms of Nato’s defence spending had led the dollar to "jittery trading", which would favour emerging markets.
At 3.31pm the rand was at R12.6713 to the dollar from R12.7178. It was at R13.6270 to the euro from R13.6575 and at R15.7004 to the pound from R15.7609 previously. The euro was at $1.0754 from $1.074.