Rand holds onto gains as North Korea threatens nuclear test
The rand was firmer on Friday afternoon, tracking the euro, as geopolitical tension put pressure on the dollar.
The decision from the South African Reserve Bank not to cut interest rates on Thursday also lifted the local unit, as it had supported inflows into the bond market, analysts said.
The decision to keep rates on hold had encouraged a significant round of buying momentum for the rand, mostly because investors had priced in the increased expectations that the Bank would cut the repo rate, said FXTM analyst Jameel Ahmad.
Other emerging-market currencies, however, traded higher to the dollar, and it was likely that this movement was linked to another escalation in geopolitical tension between the US and North Korea, said Ahmad.
North Korea’s foreign minister said on Friday the country could detonate a hydrogen bomb over the Pacific Ocean in response to President Donald Trump’s speech before the UN General Assembly earlier in the week.
Trump had also indicated that a new round of sanctions against the isolated country might be in the offing.
At 3pm, the rand was at R13.2186 to the dollar from R13.2809, at R15.8242 to the euro from R15.8571 and at R17.9503 to the pound from R18.041.
The euro was at $1.197 from $1.1941.