Rand breaks below R17 vs the dollar
The rand dipped below R17.00 against the dollar on Monday (24 August), taking full advantage of the current risk-on environment which is creating an opportunity for emerging markets to gain momentum, said Bianca Botes, executive director at Peregrine Treasury Solutions.
This, she said, comes as a result of the Jackson Hole symposium, which is due to start on Thursday, when markets are expected to get greater clarity in terms of the state of the US economy as well as the intervention that can be expected from the US Federal Reserve.
“As it stands, markets are expecting more stimulus to be deployed which would see the dollar come under pressure. We anticipate those additional funds would make their way into riskier assets.”
“The rand has gained much momentum today and we expect the local unit to reach the R16.90 level before it is likely to take a breather,” Botes said.
The broader themes of US-China tensions, the US elections and a US recovery all remain in play in the currency market, Peregrine Treasury Solutions said.
The rand and Mexican peso are currently the top performers in the EM space, TreasuryOne said in a note, adding that the local unit has also firmed against the pound, and euro.
In afternoon trade on Monday, the local unit traded at the following levels against the major currencies:
- Dollar/Rand: R16.92 (-1.38%)
- Pound/Rand: R22.19 (-1.21%)
- Euro/Rand: R20.03 (-1.02%)
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