Rand firms as emerging currencies and markets rebound

The rand was firmer against the dollar late on Thursday as global currency and equity markets calmed down after recent market routs.

The rand gains on Thursday came as the currency market consolidated after recent sell-offs.

Concerns about a slowdown in the Chinese economy and a possible global economic growth decline hit global markets‚ including emerging market currency markets‚ earlier this week.

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China cut interest rates and flooded its banking system with new liquidity late on Tuesday to halt the rout in its markets‚ which led to some calm returning to global markets.

At 3.28pm the rand was at R13.0859 against the dollar from a previous close of R13.1243.

The rand touched a best intraday level of R12.9882 to the greenback in late morning trade amid global risk-on trade.

Against the euro the rand was at R14.6991 from a previous close of R14.8484. Against the pound‚ the rand was at R20.1668 from R20.3002.

The euro was at $1.1233 from $1.1314 previously.

Meanwhile‚ solid numbers for growth and weekly jobless claims in the US lifted the dollar against the euro and the yen.

The second estimate for US second-quarter gross domestic product (GDP) showed the US economy grew at a swifter pace than had been thought‚ and above economists’ expectations‚ Dow Jones Newswires reported.

The numbers boosted the dollar after a week of large market swings and amid signals from the US Federal Reserve that a September interest rate increase looked increasingly unlikely‚ it said.

Strong data could nudge those rate expectations back toward September liftoff‚ the newswire said.

US GDP expanded at a 3.7% annual rate in the second quarter‚ up from an initial estimate of 2.3% and beating expectations of 3.3%.

Separately‚ initial jobless claims fell to 271‚000 in the most recent week‚ suggesting continued health in the labour market.

 - BDlive