Rand hits 4-month low against resurgent dollar
The rand traded at four-month lows against a resurgent dollar, ahead of a Federal Reserve meeting later on Wednesday.
The local currency traded at R12.64 against the greenback, while it remained on the back foot against the pound and the euro.
“The rand weakness is not an isolated move in the emerging markets, as the dollar was broadly bid and gained against other EM’s. It’s mainly due to the risk sentiment in EM’s and the US treasury market. Also markets will react to what the FED says about the monetary policy on Wednesday,” ETM market analyst Halen Bothma told Reuters.
“The dollar soared to an almost four-month high as the markets anticipate a hawkish Fed, driving gold prices and emerging markets lower,” said Bianca Botes, corporate treasury management at Peregrine Treasury Solutions.
The Federal Reserve is widely expected to keep its benchmark lending rate.
Data out on Wednesday includes the Absa Purchasing Managers’ Index PMI compiled by the Bureau for Economic Research (BER), while new vehicle sales data for April is also expected.
Shortly before 08h00 on Wednesday, the rand traded at the following levels against the major currencies:
- Dollar/Rand: R12.64 (0.03%)
- Pound/Rand: R17.20 (-0.20%)
- Euro/Rand: R15.18 (-0.05%)
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