Picture: Supplied
Picture: Supplied

The rand was firmer against major global currencies on Tuesday morning, strengthening the most against the dollar, with analysts saying the local currency had potential to head back to below the R15/$ level.

The dollar was on the back foot due to comments from European Union officials that a deal with the UK over its exit from the political and economic bloc could take place within weeks, analysts said.

Speeches by US Federal Reserve officials this week were also adding to this pressure, said Oanda analyst Stephen Innes.

There remained some concern in the market that a slowdown in trade, as well as tariff worries that have hit commodity and emerging markets, could provide the Fed with reason to hold off on further monetary-policy tightening.

The local focus is on ANC politics and economic data, with President Cyril Ramaphosa due to address parliament later on Tuesday on a raft of issues, including expropriation of land without compensation, and economic deals with China.

Manufacturing data for July are due at 1pm local time, and should provide further indications on the health of SA’s economy, and therefore the difficulty the government faces in reining in the budget deficit.

In the short term, dollar weakness could continue, although in the longer term the dollar was likely to strengthen, said Standard Bank currency trader Warrick Butler. The rand first needed to break through a resistance level of R15.05/$, but should it do so, it could strengthen to R14.60/$.

At 9.30am the rand was at R15.0877 from R15.20, at R17.5560 to the euro from R17.6293 and at R19.7133 to the pound from R19.8026. The euro was at $1.1636 from $1.1595.

At the same time the benchmark R186 government bond was at 9.2% from 9.225%, while the R207 was bid at 7.825% from 7.86%.

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