The rand briefly touched R14 against the US dollar in afternoon trade on Monday as political risk concerns eased.<\/p>\n
By 16h45 on Monday, the rand strengthened 1.77% against the US currency, trading at R14.00, while it also strengthened against the euro and pound, to R15.67 (1%) and R18.27 (0.77%) respectively.<\/p>\n
\u201cThe rand continues to outperform massively,\u201d RMB analyst John Cairns said in a note on Monday. \u201cEffectively, this represents the local risk premium being unwound: more than half of the blowout since the latest Hawks-Gordhan story has been reversed.”<\/p>\n
Reuters noted that the rand tested technical resistance at around R14.10, which it said could open path to further gains.<\/span><\/p>\n It said that the local unit was gaining alongside fellow emerging currencies as the dollar stumbled ahead of an interest rate decision by the Federal Reserve later in the week.<\/p>\n The Reserve Bank\u2019s monetary policy committee, meanwhile, is expected to deliver its decision on interest rates on Thursday.<\/p>\n \u201cThe central bank event risk is concentrated from Wednesday morning through Thursday afternoon,\u201d said Cairns. He said that he expected the Reserve Bank to remain on hold.<\/p>\n “Event risk this week is all about central banks, although almost certainly more about what they say than do,\u201d Cairns said. \u201cThe market prices only a 12% chance of the (US) Fed acting (on a rate hike), but we\u2019ll all be watching for signs on whether they will hike in December.”<\/p>\n The analyst said that there is a bigger probability that the Bank of Japan would cuts rates \u2014 which would potentially even get the local currency through R14.00 against the dollar.<\/p>\n Talk of removing current finance minister, Pravin Gordhan, meanwhile also subsided temporarily on Monday.<\/p>\n South Africa can still avoid a downgrade to junk: Gordhan<\/strong><\/a><\/p>\n Get ready for R16, R17 or even R19 to the dollar this year: economists<\/a><\/strong><\/p>\nMore on the rand<\/h3>\n