The rand has strengthened to below R14 to the dollar – taking the currency to to its strongest level in 2016 so far.
The rand strength was pinned to data showing a fourth straight monthly trade surplus in June, according to Reuters, while additional international factors also helped.
The rand climbed more than 1.5% to a session high of 13.89 versus the dollar – the strongest point since November 2015 – also reflecting broad-based dollar weakness after the release of US GDP data.
While the rand is currently enjoying some strength against the US currency, economists have warned that domestic issues are still working against the currency, and that the politically turbulent times ahead – following the 2016 municipal elections – will likely have a negative impact on the currency.
Investment group, Nomura, has lowered its rand/dollar forecast from R19.00/$ at the end of 2016 it had at the start of the year, to R17.00/$.
The group said that there has been no fundamental shift in the South African market during the course of the year, and that ANC in-fighting before, during and after the election would act as a blight on the currency.