Rand firmer as recession fears fade
London Capital Group’s Jasper Lawler says the prospect of additional support ‘is the sugar high that is cushioning the market from uncertainty’
The rand was firmer on Tuesday morning as the growing expectation for stimulus packages in larger economies such as China and Germany eased the fear of a global economic slowdown.
Appetite for riskier assets improved this week after China announced a reform to lower lending rates for companies and reports that Germany is preparing a stimulus plan amid concern that the country may enter a recession.
Markets are also awaiting meeting minutes from the US Federal Reserve this week as investors bet on at least two US interest rate cuts in 2019.
“The prospect of policymakers being willing to offer additional support to their economies is music to the ears of traders. This is the sugar high that is cushioning the market from continued uncertainty,” head of research at London Capital Group Jasper Lawler said.
At 9.45am, the rand had firmed 0.63% to R15.3714/$, 0.62% to R17.0309/€ and 0.95% to R18.5824/£. The euro was flat at $1.1079.
Gold had gained 0.26% to $1,499.76/oz and platinum 0.3% to $853.74. Brent crude was flat at $59.78.