Rand stable below R14/$ as greenback wobbles on dovish Fed

19 November 2018 - 15:30 By Karl Gernetzky
Picture: REUTERS
Picture: REUTERS

The rand was stable below R14/$ on Monday afternoon, bolstered by a weaker dollar environment.

The greenback came under pressure following dovish commentary by US Federal Reserve vice-chair Richard Clarida on Friday, who warned that slowing global growth could derail plans for interest-rate increases in 2019.

The dovish tone took the market by surprise as it was the first unambiguous acknowledgement by a Fed official that growth may have peaked, BK Asset Management's Boris Schlossberg said.

Trade is expected to be somewhat subdued this week, ahead of the Thanksgiving Day holiday in the US on Thursday.

Global focus is on issues of the US-China trade war and the future of UK Prime Minister Theresa May, although local events could take the reins later in the week.

On Thursday, the Reserve Bank is widely expected to raise interest rates 25 basis points, although some analysts have said that SA’s tepid economic growth, and recent stability in the rand, could prompt the Bank to keep rates on hold.

At 2.25pm the rand was unchanged against the dollar at R13.9929 and to the euro, at R15.9795, while it had fallen 0.31% against the pound to R17.9282. The euro was flat at $1.142.