Rand eases off strongest levels as US Fed takes centre stage
While there is scope for the rand to recover from its oversold levels, the outlook is still murky given the fickle global environment
The rand slipped from a multiweek high on Thursday morning, but still held below R14 to the dollar. After the US midterm elections, which delivered a blow to the dollar, markets will now focus on the Federal Reserve to get a sense of how it plans to approach interest rates in the context of the recent volatility in the financial markets. The Fed has already raised rates three times in 2018 and one more is expected in December. The Fed’s statement, due out on Thursday night, carries implications for the dollar and, by default, other currencies such as the rand. TreasuryOne currency dealer Andre Botha said in a note that more gains could still be in store for the rand if it manages to cling below R14 to the dollar. The rand has been hypersensitive to global developments, though local factors have also played a part in its recent bout of volatility. The stronger rand environment will help ease worries about the inflation outlook, thus taking pressure off the Reserve Bank, which has pre...
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