CURRENCY ALIGNMENT
ANALYSIS: Rand shows global issues eclipse local woes
Analysts expect the positive sentiment arising from Cyril Ramaphosa’s economic reforms to continue
State capture, violent protests and lacklustre growth would suggest that the rand should be one of the worst performers in the currency market, but a cursory look at its performance versus the pound would seem to suggest that the British have a bigger problem. The rand has lost about 3.5% against a rampant dollar in the past month as US treasury yields climbed past 3%, emerging markets suffered from risk-off trade and oil prices rose.Against the UK currency the rand rose about 2%, pushing its gains since Britain voted in June 2016 to leave the EU to about 22%. Rand stability so far in 2018 has surprised analysts, although in recent weeks a resurgent dollar has created additional volatility. Despite this, the rand is poised to strengthen further, said Herenya Capital’s Petri Redelinghuys. Excluding possible shocks, the rand could firm to about R11.50/$ by year end, and R10.50/$ 12 months from now. Protracted domestic political battles over patronage aside, and the implications of pos...
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