Rand firms to two-week high against softer dollar

16 October 2018 - 10:22 By Karl Gernetzky
A man holds new South African banknotes depicting former president Nelson Mandela at the South African Reserve Bank on July 13 2018 in Pretoria.
A man holds new South African banknotes depicting former president Nelson Mandela at the South African Reserve Bank on July 13 2018 in Pretoria.
Image: Phill Magakoe / AFP

The rand was firmer against major global currencies on Tuesday morning‚ reaching a two-week high against the dollar‚ as global markets continued to feel some pressure from rising global tension.

The greenback has been on the back foot as investors increasingly question the pace of US Federal Reserve monetary-policy tightening. Risk assets globally have been sold off amid the expectation that global economic growth has been slowing.

This‚ however‚ has benefited gold‚ which has firmed to a two-month high.

With the administration of US President Donald Trump also increasing the frequency of speaking out against US interest rate policy‚ the rand could benefit further from dollar weakness over the medium term‚ said FXTM global head of currency strategy Jameel Ahmad.

Global factors are expected to predominate this week‚ with an update on Brexit negotiations and the release of US Federal Reserve minutes from its last meeting taking place on Wednesday.

The medium-term budget policy statement in late October is‚ however‚ expected to increase investor interest in local issues‚ including the battle to improve governance at state institutions and enterprises.

At 9.36am the rand was at R14.3178 to the dollar from R14.3648‚ at R16.6001 to the euro from R16.6339 and at R18.8874 to the pound from R18.8914. The euro was at $1.1594 from $1.1579.

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