NEWS ANALYSIS: Rand outlook uncertain with US Fed hazy on interest-rates moves
With the dollar still the main driver of rand movements, the market has seemingly had another look at the cause of Wednesday’s 2% drop, writes Maarten Mittner
Though the rand had largely stabilised since its retreat on Wednesday, the outlook remains uncertain, with the US Federal Reserve minutes released later in the day not providing a clear indication on the timing and extent of further US interest-rate increases for the rest of 2017. With the dollar still the main driver of rand movements, the market has seemingly had another look at the cause of Wednesday’s 2% drop after reports that President Jacob Zuma’s populist faction was weakened at the ANC’s policy conference. Concern about pressure for the nationalisation of the Reserve Bank has abated. "The proposal may be an attempt to win headlines without actually changing anything," said Capital Economics analyst John Ashbourne. Some traders have positioned themselves for a weaker rand at R13.80 to the dollar, but that may be a bridge too far if emerging market sentiment remains positive.The forex markets are now eyeing Friday’s US nonfarm payroll data for clearer guidance on interest rat...
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