Rand slips back to pre-budget levels, as global sentiment turns risk-off
The rand was weaker against major global currencies shortly before midday on Thursday, as the dollar strengthened following the release of minutes from the US Federal Reserve’s January meeting. The minutes helped to stoke the fear that interest rates would rise in the US faster than previously forecast, analysts said, with the yield on US treasuries climbing back above 2.94% — a four-year high. Higher yields on US treasuries had helped precipitate a sharp sell-off in global equities earlier in February. Locally, the focus remains on the budget, with investors waiting for a response from ratings agency Moody’s to the government’s promises of fiscal consolidation. "Treasury has probably done enough to avoid the rating downgrade. Let’s see what Moody’s says, but we suspect that the risk is now mostly priced out," said Rand Merchant Bank currency strategist John Cairns. At 11.30am, the rand was at R11.7259 to the dollar from R11.6646, R14.4078 to the euro from R14.3275 and at R16.2872 t...
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