Rand firms as political risk puts dollar under pressure
The rand was stronger against the dollar on Friday afternoon, as new fears over US President Donald Trump’s policy agenda weighed on the greenback.
Analysts said the terrorist attacks in Spain, as well as the tension between the US and North Korea, also added to the risk-off sentiment.
The dollar was under pressure following Trump’s decision to dismantle two key business advisory councils, and speculation that his economic adviser Gary Cohn would resign. This helped boost the euro, which the rand usually tracks,
The latest resignation could be one of the most costly so far, as Cohn was a key figure in Trump’s tax reform and spending initiatives, said Oanda analyst Craig Erlam. Expectation of these initiatives had been at least partly responsible for the post-election rally in US markets in 2017, he said.
Stocks in tourism-related industries fell in European markets, with airlines hit hardest, reported Dow Jones Newswires.
Some focus was also on North Korea, as on Thursday, US officials said military options were still on the table, ahead of joint US and South Korean military exercises on Monday.
At 3.30pm, the rand was at R13.1948 to the dollar from R13.2597‚ at R15.5020 to the euro from R15.5480‚ and at R16.9978 to the pound from R17.0574.
The euro was at $1.1749 from $1.1724.