Picture: REUTERS
Picture: REUTERS

The rand was slightly firmer on Monday afternoon as the euro recorded further gains against the dollar. Trading volumes were thin as US markets were closed for Martin Luther King Day.

The local market continues to await new developments on the political front, regarding the position of President Jacob Zuma as head of state, with some guidance probably due to emerge after the ANC national executive committee meeting on Thursday.

At 3pm the rand was at R12.2915 to the dollar from R12.3618, at R15.0772 to the euro from R15.0852 and at R16.9481 to the pound from R16.9849.

The euro was at $1.2266 from $1.2195.

Major risk-events this week include the outcome of the Reserve Bank’s monetary policy committee meeting, which ends on Thursday. Economists expect the committee to keep interest rates unchanged, despite the recent gains in the rand.

The euro rose to another three-year high against the dollar, Dow Jones Newswires reported.

It is now up 2% on the dollar in 2018, after gaining 14% in 2017.

The euro was supported by a coalition deal between Angela Merkel and the social democrats, nearly four months after Germany’s general election.

The more the euro can gain from the prospect of the European Central Bank (ECB) reducing stimulus, the more the dollar comes under pressure, as "the Fed’s tightening plans are well known," said Marshall Gittler, strategist at ACLS Global.