The rand and local bonds extended their rally on Wednesday afternoon after softer than expected inflation data supported the local currency in what analysts call a "technical correction".Earlier, the rand broke through R14.65 to the dollar for the first time since the end of August, with the market taking the view that the it had been oversold. It is, however, still 18% weaker for the year, but is some way off its worst level of R15.69, reached on September 5.Globally, excess dollar liquidity is still expected to pressurise emerging-market currencies. "But pressures have abated in the short term, likely providing a brief relief to risk-on assets in the near term," said Nedbank analysts Neels Heyneke and Mehul Daya in a note.They said the rand was likely to test R14.60, which represents an important resistance level. Should the euro gain further ground to $1.20, it is likely that the rand could hit R14, according to the technical analysis.Inflation grew at a slower rate of 4.9% year-...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.