The rand jumped to a seven-week high on Tuesday against a weaker dollar and as foreigners bought into local bonds, with their relatively high yields offering attractive opportunities. A solid trade number boosted the rand, with the data showing a healthy increase in exports. June’s surplus of R12bn was more than double market expectations and followed May’s surplus of R3.5bn, which was revised upwards by R330m. A Bloomberg consensus forecast a surplus of R5bn for June. Traders said it was too early to predict a return of Ramaphoria as the rand was mainly reacting to international developments. With inflation in the US set to rise, the US Federal Reserve could adopt a more hawkish tone, which would almost certainly lead to even further dollar strength. This would have a deleterious effect on emerging-market currencies such as the rand.
But for now the rand bulls have it. Markets have priced in two more interest rate increases in the US in 2018. The rand reached R13.07 to the do...
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