The rand was steady on Monday morning‚ but could take direction from a shaky dollar‚ which continues to be one of the main features on global markets, writes Andries Mahlangu of Business Live.
The local currency was little changed at R12.92/$‚ but the underlying trend remains positive‚ at least in the short term.
The stronger rand works out favourably for importers‚ but tends to put pressure on exporters.
As recently as two weeks ago‚ the rand exchanged hands at R13.63/$ before rebounding strongly‚ boosted in part by favourable sentiment towards emerging markets.
Markets will this week pay attention to the US Federal Reserve’s policy meeting at which plans to wind down its $4.2-trillion bond buying programme are likely to be discussed.
The dollar‚ meanwhile‚ remains under pressure against a range of major currencies‚ affected in part by US politics‚ which led to the resignation of White House spokesperson Sean Spicer last week.
The dollar index‚ which measures the greenback against six major currencies‚ including the euro‚ was at its weakest since June 2016. The concern is that US President Donald Trump may not be able to push through his fiscal agenda.
“US political turmoil continues to damp any hope for the ‘Trump Trade’ that helped the dollar rally late last year‚” TreasuryOne dealer Phillip Pearce said in a note.
At 9am the rand was at R12.9206 to the dollar from R12.9172‚ at R15.0473 to the euro from R15.0635 and at R16.7914 to the pound from R16.7792.
The euro was at $1.1645 from $1.1664.
