Rand holds despite cloudy global backdrop
The local currency is relatively stronger, riding out perceptions of slowing growth, but trade remains light due to the festive season
The rand was relatively stronger on Wednesday morning, riding out perceptions of slowing growth, although trading conditions remain light due to the festive season.
The local currency gained against the broadly weaker dollar, helping to ease concerns about the inflation outlook.
The relative rand strength came amid a much lower oil price environment, which contributed to another a drop in fuel prices this week.
ETM Analytics market analyst Halen Bothma said the lower oil price decreases the chance of the Reserve Bank having to increase interest rates further in the near term, although he said the uncertain global environment remained a wild card.
Global markets are still edgy amid growing signs that the global economy is slowing down.
The Bank raised rates by 25 basis points in November for the first time in more than two years, citing the effect of a weaker rand on the inflation outlook
But since then oil prices have fallen significantly, which potentially changes the inflation dynamics.
Local bonds were steady in early trade, with the yield on the benchmark R186 at 8.88% from 8.8755.
At 7.23am, the rand was 0.30% firmer against the dollar at R14.3529, but relatively flat against the euro at R16.4892, and 0.25% stronger against the pound at R18.3115. The euro had gained 0.21% against the dollar at $1.1488.