The rand was a lot stronger on Thursday morning, mirroring changing market perceptions towards the dollar, after the US Federal Reserve released minutes of its most recent policy meeting. While most Fed officials expect another increase in interest rates by year-end, they expressed concern about the outlook for inflation, which has for some time been running below the 2% target. As a result, the dollar sold off, giving high-yielding emerging-market currencies further breathing space. The rand bought a single dollar at about R13.48 in early trade, which was significantly stronger than the R13.86 seen at the start of the week. The stronger currency suggests a revival of the so-called carry trade, where money is borrowed in low interest-rate environments and invested in currencies that offer higher returns. The stronger currency helps keep inflation in check, though it doesn’t bode well for exporters. "Doubts have been put to rest: it is now clear that the dollar rally has abated and t...
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