Rand firms on GDP prospects and a flat dollar
The rand was firmer against the dollar on Monday at midday amid expectations of a strong GDP number on Tuesday‚ for the economy to dodge a technical recession.
The rand was also supported by a flat dollar‚ which has not moved against the euro as the market priced in only a 30% likelihood of a US interest-rate increase later in the month.
Liquidity was low due to the US public holiday as Americans celebrated Labor Day.
At 11.30am‚ the rand was at R14.3919 against the dollar from R14.4750 at the previous close.
It was at R16.0717 against the euro from R16.1696 previously‚ and at R19.20139 against the pound from R19.2669 previously.
The euro was at $1.1168‚ from $1.1157 at Friday’s close.
"The possibility of a further strengthening of the rand‚ based on the technical picture‚ looks really good especially if we can move and close below R14.40/$ on the day‚" Standard Bank trader Warrick Butler said.
Better local GDP numbers for the second quarter would support the rand. Economists are forecasting that the economy avoided a technical recession and instead was likely to have grown by a seasonally adjusted and annualised 2.7%.
The growth would follow a 1.2% decline in the first quarter. The 2.7% is a Business Day median consensus forecast from a survey of seven economists.
- TMG Digital/BDlive