The rand was on firmer footing on Friday morning, looking to cap the week on a high note. The local currency has been steadily recovering to the dollar, which has hit a soft patch amid uncertainty over whether the US Federal Reserve would stick to its interest-rate hiking cycle in 2018. The question marks surfaced earlier in the week when Fed officials expressed concern about the medium-term outlook for inflation, which has consistently run below the 2% target. “The market has come to accept a December rate hike, just as it had to be led by the hand to recognise the March hike. It has been sceptical of hikes next year,” Brown Brothers Harriman analysts said in a note. As the dollar sagged, the rand recovered in line with other emerging-market currencies, suggesting the revival of the so-called carry appeal, 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 doe...
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