A rate increase in future is widely expected to strengthen the dollar and weigh on other markets.
At 3.25am‚ the rand was at R15.1885 to the dollar from R15.3496 at the previous close. It was at R17.1029 against the euro from R17.2310 previously‚ and at R21.6937 against the pound from R21.7972 previously.
The euro was at $1.1262‚ from $1.1226 previously.
Research house NKC analysts said the rand had traded mostly weaker during this holiday-shortened week‚ with traders nervously watching for an indication of the next interest rate increase by the US Fed‚ and general risk aversion stemming from the possible exit of Britain from the EU.
The rand traded firmer against the US dollar during Monday’s European session‚ clawing back some of the losses seen at the end of last week‚ they said.
Traders were nervous‚ with the local unit vulnerable to foreign sentiment going into the US Fed meeting on Wednesday‚ as well as South African current account data on Tuesday‚ the analysts said.
Following the wider-than-expected South African current-account deficit in the first quarter of 2016‚ the rand “knee-jerked” weaker on Tuesday‚ they said.
SA’s second quarter current-account deficit widened to 5% of GDP in the first quarter of 2016.
The analysts said the rand traded firmer on Wednesday‚ despite disappointing South African retail sales data‚ while local markets were closed on Thursday‚ but the rand weakened to a three-week low in international markets following the US Fed’s press release.
Although the US central bank kept interest rates unchanged‚ the scene “is still set” for two increases before the end of 2016‚ they said.
- TMG Digital/Business Day
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