Rand mixed as spotlight shifts to Brexit vote
Local currency firms against the dollar following dovish Fed comments, while the pound finds some support ahead of next week’s Brexit vote
The rand was mixed against major global currencies on Friday afternoon, firming against the dollar, but weakening against the pound following comments from a UK minister.
UK foreign secretary Jeremy Hunt said on Friday that any parliamentary rejection of a Brexit deal could prevent the UK leaving the EU at all, something which lifted sterling, reported Dow Jones Newswires.
There is increasing speculation that next Tuesday’s vote on a draft deal will end in defeat for UK Prime Minister Theresa May.
The pound has been relatively steady this week, but that is unlikely to last, said Oanda analyst Craig Erlam. Traders are, no doubt, making preparations for significant volatility in coming days.
The dollar was under some pressure after US Federal Reserve chair Jerome Powell said in a speech on Thursday night that the Fed was in no rush to raise interest rates. January has seen the Fed strike a decidedly dovish tone, adopting a wait-and-see approach as it considers tightening monetary policy in the face of geopolitical risks, such as the US-China trade war.
At 2pm, the rand was 0.27% firmer at R13.8163/$ and flat at R15.9302/€. It was 0.29% weaker at R17.718/£. The euro was 0.26% stronger at $1.1531.