The rand was slightly firmer at midday on Friday ahead of President Cyril Ramaphosa’s state of the nation address (Sona) in the evening‚ amid rising optimism about next week’s budget.
Ramaphosa’s election to head of state has spurred positive trade in the rand. The local currency has gained more than 3% against the dollar so far this week. Analysts said the rand was poised to break through R11.55 to the dollar‚ after which it may even target R11.
At 11.30am‚ the rand was at R11.5899 to the dollar from R11.6163‚ at R14.5210 to the euro from R14.5277‚ and at R16.3483 to the pound from R16.3784. The euro is at $1.2530 from $1.2508.
The rand is currently benefiting from a number of positive factors‚ including the broad-based dollar weakness‚ analysts at Nedbank Corporate and Investment Banking said. This has seen it trade from above R12 to the dollar at the beginning of the week‚ to the current levels in the mid R11.50s.
“The focus is now firmly on the state of the nation address from the new President tonight‚ and any possible changes in the Cabinet‚ and the budget speech next week.”
Some analysts reckon the current dollar weakness is overdone‚ considering that the US Federal Reserve is set to hike interest rates at least three times in 2018.
“The biggest single factor undermining the dollar this year has been the improvement in the global economy‚” said Kit Juckes‚ a strategist at Société Générale‚ in a note to clients. “A more balanced economic recovery drags investment away from the US and towards more interesting markets.”
-BusinessLIVE
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