South Africa’s rand eked out gains early on Friday as positive trade data from China helped ease some of the uncertainty over the global economy that has seen emerging markets struggle for most of the week.
Speaking to Reuters, senior analyst at Nedbank, Reezwana Suma noted that the rand had lost some ground in the overnight session as global uncertainty on a number of fronts continued. However it remains firmly within the technical range between R11.80 and R12.20.
This was echoed by Wichard Cilliers, director and head of dealing at TreasuryONE, who said that he expected to see the same theme continue throughout the markets.
“The range within which the ZAR has traded all week is likely to hold once more,” he said.
“There is quite simply nothing on the cards for today that is likely to generate a major market move and the R11.90 to R12.15 range is therefore expected to hold.”
“There is been no real data released yesterday and also none scheduled for today to influence the market. President Trump toned down his comments that an imminent strike on Syria was on the cards, saying he never said when it would happen.
“The other emerging market currencies like the RUB and TRY has traded stronger against the USD and this has also helped the rand.
“We will continue taking our direction from abroad and we will need to keep an eye on what happens in the US equity market space as a lot of companies is currently reporting earnings. This will give us an idea of what direction the USD wants to take.”
On Thursday, Bloomberg reported that despite being named the ‘world’s most volatile currency’ over the last year, the rand was set to become an unlikely haven for emerging market traders.
The rand’s implied, or expected, volatility over the following three months is below that of the peso, ruble and lira for the first time since at least 2005, according to data compiled by Bloomberg.
It’s a turnaround from just two weeks ago, when investors priced the rand’s future volatility higher than any of its peers.
Notably, South Africa is becoming something of a haven because many investors are optimistic about economic reforms under new President Cyril Ramaphosa, Bloomberg said.
The rand was trading at the following levels against the major currencies at 09:50on Friday (13 April):