Shaky dollar allows rand to stage recovery
The rand fared better on Thursday morning, partly reflecting a weaker dollar that is battling to find clear direction amid uncertainty about the trajectory of US interest rates in 2018.
The local currency has been under pressure for most of this week, shaken by news of a Cabinet reshuffle, which President Jacob Zuma announced on Tuesday.
Rand Merchant Bank currency strategist John Cairns expects the rand to recover from the setback caused by the sudden changes to the executive, which was the second Cabinet reshuffle in six months.
"The sharp rand weakness of the past few days was spurred by the Cabinet reshuffle. And it was justified, given the unexplainable gains of last week."
The weaker currency fans inflation, which rose to an annual rate of 5.1% in September, from 4.8% in August.
The elevated inflation comes at the time when international Brent crude price is near the upper end of its recent trading range, at $58 per barrel.
Brown Brothers Harriman analysts said the rand was a "wild card", which could prevent the Reserve Bank’s monetary policy committee from cutting interest rates during its scheduled meeting in November.
At 9.33am, the rand was at R13.5221 to the dollar from R13.5765.
It was at R15.9655 to the euro from R16.0108 and at R17.8336 to the pound from R17.9175.
The euro was at $1.1807 from $1.1794.