Rand set for biggest weekly gain against the dollar since December
The rand rallied on Friday morning, putting it on track for its best weekly gain against the dollar since December.
The rand benefited from a favourable global environment in particular, while a slightly upbeat assessment of the South African economy from ratings agency Moody’s boosted sentiment.
The dollar continued its retreat on global markets, benefiting the rand and other emerging-market currencies.
The retreat in the dollar coincided with a decision on Thursday by the Turkish central bank to aggressively raise interest rates, which helped take the pressure off the lira and its peers.
"The question now becomes whether [emerging-market currencies] have a definite change of momentum or if this is just a knee-jerk reaction to the events in Turkey," said Andre Botha, senior currency dealer at TreasuryOne.
Turkey was in the eye of the storm recently when its currency plummeted due to political and economic concerns — a development that hurt sentiment towards emerging markets.
Meanwhile, Moody’s has allayed concerns that SA’s investment grade status could be under threat, saying on Thursday that it expects the economy to pick up.
Its comments came just more than a week after news that the economy had slipped into a technical recession for the first time in a decade, raising concerns whether SA will be able to balance its books.
At 10.11am, the rand was at R14.7363 to the dollar, from R14.7689 on Thursday. It was at R17.2662 to the euro from R17.2656,and at R19.3425 to the pound from R19.3559. The euro was at $1.1717 from $1.1690.
The yield on the benchmark R186 bond was at 9.11%, from 9.10%.