The rand was slightly firmer against major currencies on Tuesday morning as global growth sentiment supported emerging markets writes Reitumetse Pitso.
Upbeat manufacturing data out of China and around the world has buoyed market sentiment‚ signalling growth prospects at the start of the second half of the year. This has pushed up commodity prices.
Rand Merchant Bank analyst John Cairns said that the “ideal environment for the rand is strong global growth (that pushes up commodity prices and encourages flows to emerging markets) without an inflation surge that would force central banks to tighten policy (and bring cash back home)“.
“For now‚ don’t expect a meaningful rand recovery … as foreigners have been selling out of local assets on the back of the rise in global yields.”
Investors will also be paying close attention to the ANC policy conference‚ which ends on Wednesday. Critical issues such as economic transformation and land redistribution are under discussion‚ but are unlikely to be effected immediately.
Business Day reported that Finance Minister Malusi Gigaba was preparing to join the Reserve Bank in taking Public Protector Busisiwe Mkhwebane’s report on the Bankorp bail-out on judicial review.
At 9.31am the rand was at R13.1908 to the dollar from R13.2155‚ at R14.9872 to the euro from R14.15.0175 and at R17.0663 to the pound from R17.0980.
The euro was at $1.1361 from $1.1364.
