After breaking below R14.70/dollar on Tuesday (22 October), the rand quickly made its way to levels in the low R14.60s as emerging market stocks rallied.
Key to this rally is positive sentiment regarding the US-China trade war, says Adriaan Pask chief investment officer at PSG Wealth.
“Chinese vice-foreign minister Le Yucheng said on Tuesday that the two economic superpowers had made some progress in their trade negotiations,” he said.
Speaking at the Xiangshan Forum in Beijing, Le said that any problems between the two countries could be resolved as long as both sides respected each other.
The world wants China and the United States to end their trade war, he said. That required openness rather than a “de-coupling” of countries or a new Cold War.
The negotiations between the two countries is likely to be the centre of attention once again on Wednesday, with no other major events on the data calendar, says Bianca Botes, treasury partner at Peregrine Treasury Solutions.
Looking locally, Botes said that the Consumer Price Index (CPI) set to be released by StatsSA today will assist in setting the tone for the SARB interest rate decision in November.
At 08h15 on Wednesday, the rand was trading at the following levels against the major currencies: