Picture: ISTOCK
Picture: ISTOCK

The rand extended gains on Thursday morning as the dollar wobbled in the wake of the US Federal Reserve minutes that pointed to growing concern about low inflation.

This could lead to the Fed pausing in its rate-increasing cycle, which would benefit higher-yielding, emerging-market currencies such as the rand.

On Thursday morning the local currency changed hands at about R13.15 to the dollar, its best level in just more than a week.

The favourable global backdrop came on the heels of local June retail sales, which grew at the fastest rate since November, suggesting that the economy could be on the road to recovery after the soft patch in the first quarter.

The stronger rand helps to keep a lid on inflation, which is expected to moderate further in 2017.

Nedbank analysts expect the South African Reserve Bank to cut rates at least three times between September 2017 and March 2018.

At 9.08am, the rand was at R13.1526 to the dollar from R13.1781‚ at R15.4699 to the euro from R15.5071 and at R16.9521 to the pound from R16.9884

The euro was at $1.1764 from $1.1767

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