Annabel Bishop, Investec chief economist noted<\/a> that the US left interest rates unchanged again, as expected, and the Federal Open Market Committee<\/span> (FOMC) maintained its dovish tone. That allowed the rand to strengthen from R14.61\/USD to 14.39\/USD on Thursday.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Bishop said that commodity prices have risen from a low point in November 2015, lifting particularly in March and April, which has also assisted the domestic currency stronger, as South Africa is a substantial commodity exporter.<\/p>\n “Along with global risk-on into emerging market assets over this period, the rand pulled back from close to R17.00\/USD in January, to R14.15\/USD recently. It then rebounded slightly weaker to R14.20\/USD, which is a key resistance level. Global events continue to be the main driver of domestic currency strength,” Bishop said.<\/p>\n The economist said that from a credit rating perspective the country continues to await Moody\u2019s outturn on its current assessment of South Africa\u2019s creditworthiness, which is widely believed will be a downgrade to align its ratings closer to S&P and Fitch\u2019s sovereign ratings of SA.<\/p>\n “S&P remains likely to downgrade SA this year on the local currency front (currently BBB+, to BBB) not the hard currency one (now BBB-) to bring greater alignment – and equate with Fitch\u2019s ratings.”<\/p>\n This could occur on 3 June 2016, and is not expected to deliver a sub-investment grade outcome, although one is always possible, Bishop said.<\/p>\n Rand trading at strongest levels in four months<\/strong><\/a><\/p>\n What a ratings downgrade means for the rand<\/strong><\/a><\/p>\n![\"rand](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2016\/04\/rand-1-29042016.png\")
<\/a><\/p>\nMore on the rand<\/h3>\n