Rand on shaky ground ahead of US inflation data
The rand was on a shaky ground on Thursday morning, thanks to a dollar that has rebounded fairly sharply from its recent lows.
The rand changed hands to the dollar at R13.12, which was near a three-week low, showing the vulnerability of the local currency to offshore events.
Fresh optimism about potential tax cuts in the US improved the fortunes of the dollar, although some analysts say the greenback was oversold
The release of US inflation data in the afternoon could provide fresh direction to the dollar and global markets.
Consumer inflation, which the US Federal Reserve takes into account when deciding interest rates, is expected to have accelerated to an annual rate of 1.8% in August, from 1.7% in July.
Despite clear signs that economic growth is picking up in the world’s largest economy, inflation has remained stubbornly below the Fed’s 2% target.
"US CPI [consumer price inflation] is always one of the events closely watched as investors keep looking for indications for the next possible rate hike," TreasuryOne dealer Gerard van der Westhuizen said.
The local currency showed little reaction SA’s current account data. SA’s current account deficit widened to 2.4% of gross domestic product (GDP) in the second quarter, from 2% in the preceding quarter, according to the Reserve Bank data
At 9.58am, the rand was at R13.1182 to the dollar from R13.1317, at R15.6189 to the euro from R15.6089 and at R17.3391 to the pound from R17.3483.