Picture: REUTERS
Picture: REUTERS

The rand was firmer on Friday afternoon, looking set for its best week against the dollar in nine months. 

The local currency has gained more than 3% against the dollar since Sunday, benefiting from talks of possible rate cuts in the US and the eurozone.

The US Federal Reserve kept interest rates unchanged after a two-day federal open market committee meeting this week. However, Fed chair Jerome Powell said that uncertainties such as the US-China trade war and weak inflation could call for accommodative monetary policy. European Central Bank (ECB) president Mario Draghi said earlier this week that the ECB might loosen monetary policy, should inflation remain subdued.

The comments by leaders of the major central banks buoyed the rand, which reached a best level of $14.19/$ on Thursday.

By 2pm, the rand had strengthened 0.12% to R14.3255/$ and 0.49% to R18.1338/£, while it had weakened 0.1% to R16.2092/€. The euro was up 0.22% to $1,1315.

The benchmark R186 government bond was weaker, with its yield rising 9.5 basis points to 8.135%. Bond yields move inversely to bond prices.

The market found little comfort in President Cyril Ramaphosa’s state of the nation address (Sona) on Thursday evening, as investors wait for more detail on economic policy. 

“Ramaphosa provided essentially no policy detail in yesterday’s ambitious state of the nation speech. Indeed, he seems to have walked back his plan of a relatively modest restructuring of the state’s failing energy firm,” John Ashbourne, senior emerging-markets economist at Capital Economics said in a note. “This suggests to us that divisions within the ruling party are holding back reforms.”

Gold was last up 0.51% to $1,395.28/oz, peaking above $1,400 in intraday trade, while platinum was down 0.1% to $805.36. Brent crude gained 1.51% to $65.26 a barrel, amid concerns over the growing tension between the US and Iran. 

mjoo@businesslive.co.za