Rand firms in afternoon amid more risk-on trade

The rand was firmer late on Tuesday amid a more risk-on trading environment‚ after Chinese growth figures were better than the most pessimistic investors expected.

There were no major negative surprises as China’s gross domestic product (GDP) growth figure for the fourth quarter came in at 6.8% year on year‚ from a consensus forecast of 6.9%.

The rand and other commodity-based currencies also benefited from stronger commodity prices.

At 3.30pm the rand was at R16.6531 against the dollar from R16.8665 previously.

Against the euro‚ the rand was at R18.1035 from R18.3776 previously. It was at R23.6765 against the pound from R24.0328.

The euro was at $1.0875 from a previous $1.0895.

TreasuryOne chief currency dealer Wichard Cilliers said it should be noted that the weaker fourth-quarter GDP for China did confirm that the world’s second-largest economy was slowing and that if the GDP figure were broken down‚ it pointed to an overall weakness in its economy.

That meant China was in for a bumpy landing this year‚ but not an immediate crash landing as many had feared‚ Mr Cilliers said.