Rand range-bound as market eyes risks, awaits SARB rates decision
The rand was slightly softer on Tuesday afternoon, albeit range-bound, as the dollar recovered a little from its recent weakness.
At 2.03pm, the rand was down 0.25% against the dollar at R14.0679, 0.05% against the euro at R16.0805, and 0.21% against the euro at $1.1431. The euro was 0.2% weaker at $1.1431.
The greenback wobbled a bit after dovish commentary from US Federal Reserve vice-chair Richard Clarida on Monday. However, interest in safe-haven assets gave the dollar a bit of a boost on Tuesday.
Global markets are watching Brexit developments and issues of the US-China trade war, although the Thanksgiving holiday on Thursday has subdued activity a little.
The local currency is expected to be largely range-bound, taking direction from the dollar, until Wednesday when local inflation data for October will be released.
The print comes ahead of the Reserve Bank’s interest-rate decision on Thursday, which, according to a Bloomberg consensus, could see a 25-basis-point increase in the repo rate. Bank of America Merrill Lynch analysts, however, said on Tuesday that they expected the Reserve Bank to keep rates on hold, saying inflation should average 5.3% in 2019 — well within the Bank's target band of 3%-6%.
The analysts also forecast economic growth of 0.9% for 2018 — slightly higher than the government’s forecast of 0.7%.