The rand was on the defensive on Thursday morning, taking its direction from overseas markets.The dollar stood tall against a basket of currencies, after the US Federal Reserve signalled that it was on course to increase interest rates by year-end. The yield on the benchmark US 10-year note rose to its strongest point since mid-August at 2.29%, implying that markets expected the Fed to follow through on its signal on rates.Higher US rates have potential to divert fund flows from higher yielding emerging market currencies.The rand sank as far as R13.38 to the dollar, its weakest level in nearly five weeks. Other emerging-market currencies such as the Indian rupee were also weaker against the greenback."By still anticipating another hike this year, the underlying signal from the Fed was somewhat more hawkish than the market expected," Brown Brothers Harriman analysts said in a note.Attention now turns to the Reserve Bank’s monetary policy committee (MPC), which concludes its three-day...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.