Rand firms 1% to the dollar as market digests soft Brexit
Easing tension and comments by US Fed chair Jerome Powell about US headwinds in 2019 put the dollar on the back foot
The rand was firmer against major global currencies on Thursday morning, bolstered by dollar pressure stemming from a gloomy assessment of the US economy in 2019.
US Federal Reserve chair Jerome Powell has warned that slowing global growth in 2019 could remove a tailwind for the US economy, noting that this was being closely watched by the world's most influential central bank.
The euro and pound were also under mild pressure, as markets considered the implications of a draft Brexit deal that received the UK cabinet's approval on Wednesday.
The draft deal, which includes among other things a customs union agreement until the end of 2020 pending a new trade agreement, still requires the approval of the UK Parliament.
Should this occur, the deal is expected to be signed on November 25.
At 9.31am the rand was 1.1% firmer against the dollar at R14.2372, 0.79% against the euro at R16.1519 and 0.93% against the pound at R18.5286. The euro was 0.31% stronger at $1.1344.
There are few major data releases this week, with focus on the dollar, the oil price and issues of the Italian deficit.
The dollar had benefited from heightened geopolitical risk, and as volatility subsided, weakness in the greenback was expected to provide a fillip for the rand, Rand Merchant Bank analyst Nema Ramkhelawan-Bhana said.
"Having recorded the best daily spot return in the emerging-markets basket, the local unit’s ability to push lower depends on whether the euro is able to consolidate recent gains and global equity losses abate," she said.