Rand firmer on broad dollar weakness

11 February 2016 - 18:31 By Maarten Mittner
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Image: Gallo Images / Foto24 / Brendan Croft

The rand turned firmer on Thursday afternoon amid renewed dollar weakness against the euro.

US Federal Reserve chairwoman Janet Yellen’s comments before Congress on Thursday caused the dollar to retreat in risk-on trade as she warned global economic instability may result in the Fed holding back on further interest rate increases.

However‚ the rand remains vulnerable ahead of President Jacob Zuma’s state of the nation address tonight.

The rand received some support from better-than-expected manufacturing and mining data for December. It provided a rare piece of good news for the economy‚ but even so it looked like gross domestic product growth over the fourth quarter as a whole probably weakened‚ Capital Economics analysts said.

Total manufacturing output grew an annual 0.4%‚ after contracting 1.2% in November. The consensus forecast was for an annual decline of 1.5%. The annual rate of decline in mining production slowed further in December‚ easing to 0.3% from 1.3% in the previous month.

At 3.29pm the rand was at R15.8588 against the dollar from a previous close of R15.8836.

Against the euro‚ the rand was at R17.9876 from R17.9428 and was at R22.8409 against the pound from R23.0800 previously.

The euro was at $1.1343 from $1.1294 previously.

Mr Zuma’s speech was due to commence at 7pm.

TMG Digital/BDlive

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