File Picture: REUTERS
File Picture: REUTERS

The rand was slightly firmer on Tuesday morning, as the dollar remained under pressure to the benefit of emerging-market currencies and the gold price.

The price of gold pushed higher, bolstered by a weaker dollar and the expectation of loose monetary policy, to a fresh 2019 high on Tuesday morning. A higher gold price tends to support the rand, as gold exports are a key foreign-exchange earner for SA.

Some domestic issues were weighing on the rand a little, however, TreasuryOne senior currency dealer Andre Botha said in a note, even though the global climate seems favourable for rand strength. “This is a recipe for volatility and we could see opportunities for both importers and exporters in the short to medium term as sentiment can shift on a headline.” 

At 9.42am the rand was 0.19% firmer at R14.3386/$ and 0.26% stronger at R16.3323/€, while remaining flat at R18.2967/£. The euro was flat at $1.139.

Gold was up 1.01% to $1,433.60/oz.

Gold has also found support from the tension in the Middle East, with the White House implementing new sanctions on Iran on Monday, targeting the country’s leaders.

While a weaker dollar is a theme on the market at present, trade on global markets is expected to be slightly subdued this week ahead of the G20 meeting at the weekend.

US President Donald Trump and Chinese President Xi Jinping are set to meet on the sidelines of the meeting, with markets closely watching developments for a sign that the parties may move closer in reaching an agreement to end the US-China trade war. Any escalation could prompt risk-aversion on global markets, and put pressure on the rand.