Rand at three-month high to dollar as market awaits ANC election news
The rand was stronger against major global currencies in volatile trade on Monday afternoon, with market focus squarely on the continuing ANC conference in Johannesburg.
The market is watching the conference closely, as ANC MP Nkosazana Dlamini-Zuma and Deputy President Cyril Ramaphosa are contesting the party’s presidency.
The rand gained significantly on Friday, after a number of legal setbacks for Dlamini-Zuma’s camp, but analysts said the outcome of the election was still too close to call.
Markets continued to price in a slight lead for Ramaphosa at the weekend, analysts said. He is seen as the more business-friendly candidate.
R12.74/$ appeared to be the resistance level for a market-friendly outcome, said Rand Merchant Bank currency strategist John Cairns, but what was less clear was how much the rand would weaken in the event of a Dlamini-Zuma victory.
In the latter case, the rand could drop as far as R14.50/$, he said.
The rand was also tracking a firmer euro, which gained amid concerns over the pace of US tax reforms. The dollar had strengthened on Friday, after House and Senate Republicans reached a deal on a single version of the bill.
The Senate could ratify the bill as early as Tuesday, and US President Donald Trump could sign and bring the bill into law by the end of the week, said FxPro analysts. As always, there were concerns within the market that the process might not be smooth, the analysts said.
At 3pm‚ the rand was at R12.8319 to the dollar from R12.9651‚ at R15.1356 to the euro from R15.2362, and at R17.1612 to the pound from R17.2759.
The euro was at $1.1795 from $1.1745.