An almost 25% gain in the oil price this week has put a dent in the rand\u2019s rally, with local currency trading at 0.21% down at R13.41\/$ on Friday at 08:30.<\/p>\n
\u201cThe oil rally is proving a hindrance for the rand,\u201d said RMB analyst John Cairns. \u201cBrent pushed through the psychological $50\/bbl level overnight, for a gain of almost 25% in the past two weeks.\u201d<\/p>\n
\u201cOil gains can at times be good for the rand, like early this year when the market bounced off its post-crisis lows of US$27\/bbl,\u201d he said. \u201cThis time around, however, the oil rally is not a sign of better global economic conditions, but rather due to speculation that oil producers might cut back supply.<\/p>\n
\u201cThe general oil producers’ meeting on 27-28 September and the formal Opec meeting in late November are now key event risks to look out for.\u201d<\/p>\n
Umkhulu Consulting\u2019s Adam Phillips said on Friday that \u201cwe could see a mild ‘risk off’ day today\u201d, meaning the rand could lose more ground against the dollar.<\/p>\n
Phillips sees the rand trading between R13.20 to R13.50 against the dollar on Friday and \u201cpossibly for the rest of next week\u201d.<\/p>\n
\u201cEquity markets have been quiet overnight and unless they put in a good performance, I don’t see a good reason for emerging market currencies appreciating today,\u201d he said.<\/p>\n
Cairns said the latest US Federal Reserve developments were not rand friendly – which was more significant than the oil price rally. \u201cTwo Fed hawks were at it again last night, hinting that a hike is justified in September,\u201d said Cairns.<\/p>\n
\u201cMost of the rest of the Federal Open Market Committee seem to disagree, but the almost daily talk of hikes keeps the market nervous,\u201d he said.<\/p>\n
\u201cThe ECB (European Central Bank) has not helped either. The minutes of their last meeting, released last night, suggest that they are still some way from further easing.\u201d<\/p>\n
The rand was also trading 24 US cents lower at R15.20 against the euro and 0.16% down at R17.63 against the pound at 08:30.<\/p>\n