As global recovery from the Covid-19 pandemic continues, risk appetite is soaring – with the rand remaining one of the best performing currencies globally.
The local currency rallied on positive global and domestic economic data last week, breaking R14.20/dollar on Thursday, levels which were last seen pre-pandemic.
However, the upside was tapered by the country’s vaccine drive’s suspension amid safety concerns over the Johnson & Johnson vaccine, said Nedbank economists in a research note on Monday (19 April).
“Still, the local unit ended the week 1.9%, 1.2% and 1.3% stronger against the US dollar, the euro and the British pound, respectively. Over the past four weeks and on a year-to-date basis, the rand registered exceptional gains against the above currencies.”
While the rand continues to be seen in a positive light, economists have indicated that the local currency will likely need to break through a few technical levels before it breaks the R14/dollar mark.
“The rand is seeing largely range-bound trading, following the gains witnessed last week, operating in a range of R14.18/14.29. A break below R14.18/$ will open the door for levels closer to the R14.00/$ mark,” said Bianca Botes, executive director at Citadel Global.
“With little global activity that could really move markets substantially at this point, it’s all eyes on tomorrow’s local CPI data and interest rate guidance from the BoE and ECB later this week.
The rand was trading at the following levels against the major currencies at the start of trading on Tuesday (20 April):
- Dollar/Rand: R14.20
- Pound/Rand: R19.88
- Euro/Rand: R17.13