Rand weaker as higher interest rates loom
A stronger dollar creates a negative environment for the rand as the JSE all share surges and bond yields rise
The rand weakened 1.4% against the dollar on Wednesday afternoon in a stronger dollar environment, despite the JSE surging 3%. Volumes on the JSE were on the low side, just exceeding R10bn a few hours before the close, indicating that offshore investors have not entered the market on a large scale. The market was eyeing the release of non-farm payroll data in the US on Friday, with a better-than-expected number set to boost the dollar as it would indicate a stronger US economy. The South African Reserve Bank earlier indicated that local interest rates are set to rise within the next two years, as consumer inflation could reach the upper band of the Bank’s 3% to 6% inflation target. The Bank’s monetary policy committee (MPC) will have its last meeting of the year from November 20 to 22. “With no real impetus in markets at the moment, we expect the rand to trade in narrow bands while we await Friday’s non-farm payroll numbers,” TreasuryOne senior dealer Andre Botha said. He added that...
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.