Rand firmer ahead of US Fed meeting
The dollar is under strain amid market expectations of a dovish US Fed stance, while load-shedding is a local risk factor
The rand was a little firmer against major global currencies on Tuesday afternoon, benefiting from a weaker dollar environment.
All eyes are on the US Federal Reserve monetary policy announcement on Wednesday, with markets expecting the Fed to once again adopt a dovish tone, and possibly downgrade its growth forecasts for 2019.
Pressure on the dollar has boosted the gold price, to the benefit of SA, which is a major producer.
Gold has found favour due to the dovish stance taken by central banks around the world, and the dollar has “hit a ceiling”, said Oanda analyst Craig Erlam.
Some focus on Wednesday will also be on local data, with both retail sales numbers for January and the February inflation rate due. Better-than-expected numbers could benefit the rand, but the local currency’s longer-term outlook remained dependent on international factors, said FXTM research analyst Lukman Otunuga.
At 2pm, the rand the rand was up 0.45% to R14.3737/$, 0.27% at R16.3235/€ and 0.23% at R19.084/£. The euro was 0.18% stronger at $1.1355.
Some focus is also on Brexit, with UK Prime Minister Theresa May scrambling for a solution after her plans to table her draft agreement for a third vote was blocked.
May is expected to meet EU leaders on Thursday, but analysts say her attempts to get an small extension on the Brexit deadline may be a tough sell.